WASHINGTON, Aug. 8, 2013 – The Food and Agriculture Organization of the United Nations’ (FAO) Food Price Index fell for the third consecutive month in July, the group announced today. Last month’s index is 2 percent below June 2013 levels and 3.3 percent below July 2012 levels.

FAO says the drop is mostly due to lower international prices for grains, soy and palm oil. The group says low prices for sugar, meat and dairy have also contributed to the falling price index.

The Cereal Price Index is down 3.7 percent from June and nearly 13 percent from a year ago. The “sharp decline” reflects falling corn prices amid better weather forecasts and “hopes of a significant production increase”in countries like the U.S., FAO said.

The Oils/Fats Price Index is at its lowest level in three years, down 3.3 percent since June. Increased soy soil values, especially from Argentina, are partially responsible for the fall, as is an ease in demand from the biodiesel sector. Palm oil price weakness is due to the increased production and lower than expected import demand, especially from China.

 
The Meat Price Index is virtually unchanged from revised June levels. Reduced import demand from Asian countries, in particular, indicates that international prices for meat are weakening, FAO said.

The FAO Food Price Index is a measure of the monthly change in international prices of a basket of food commodities. It consists of the average of five commodity group price indices (representing 55 quotations), weighted with the average export shares of each of the groups for years 2002-2004.

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FAO will release its next Food Price Index Sept. 8.

For more on the Food Price Index, click here.

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