Global food prices continued to fall in January from over previous month partly influenced by high inventories, a strong US dollar and weak crude oil prices, according to the United Nations food agency FAO.
On FAO’s price index, food prices averaged at 182.7 points for January, down by 1.9 per cent from December 2014 levels of 186.2 points, it said in a statement.
The index measures monthly price changes for a basket of cereals, oilseeds, dairy products, meat and sugar.
“The index has been on a downward path since April 2014. The January decline was partly influenced by robust inventories, continued strength in the US dollar and weak crude oil prices,” the FAO said.
Strong supply conditions pushed down prices of wheat, pork and soy oil globally, it said.
Lower prices reflect strong production expectations as FAO also raised its 2014 forecast for world cereal production to a record high and noted that early indications for crops in 2015 are favourable, it added.
According to FAO, international wheat prices fell by 7 per cent in January from the December levels, reflecting ample supply conditions.
In case of vegetable oil, the decline was driven largely by ample supplies of soya oil and lower crude oil prices, which erode attractiveness of using vegetable oils for bio-diesel.
Meat prices fell partly due to the US dollar’s strength, notably against the euro, as well as by abundant global pigmeat availability for export.
However, dairy prices were stable in January as rising butter prices offset a decline in prices – spurred in part by the weakening euro – for cheese and skimmed milk powders.
Sugar prices also remained virtually unchanged from December, it added.