Global food prices fell to a six-month low in July as plentiful grain harvests pushed prices lower, the United Nations’ Food and Agriculture Organization said.
The U.N.’s Food and Agriculture Organization said the food price index, which measures monthly price changes in cereals, dairy, meat, sugar and oilseeds, averaged 203.9 points in July 2014, down 1.7 percent from the same month a year ago. It was the fourth straight month the food index declined.
“The lingering decline of food prices since March reflects much better expectations over supplies in the current and forthcoming seasons, especially for cereals and oils, a situation that is expected to facilitate rebuilding of world stocks,” said FAO senior economist Concepción Calpe.
The FAO increased its global forecast for cereal production, which includes grains such as corn, rice, oats and rye, by 19.84 million tons to 2.8 billion tons.
The plentiful corn crop, a result of timely rains and relatively mild temperatures in most areas this season, has pushed prices to $3.60 a bushel, their lowest level in nearly four years, and down sharply from more than $8 a bushel in 2012. Similar multi-year lows also have been noticed in soybeans.
The Agriculture Department is scheduled to update its forecast for corn, soybeans and other crops Tuesday. Currently, the USDA is calling for a record 3.8 billion bushels of soybeans and 13.86 billion bushels of corn to be produced, just below last year’s record. Market analysts expect favorable weather across much of the Corn Belt this summer will be enough to boost corn production to a record.
For more, CCTV America spoke to Maximo Torero, director of the Markets, Trade, and Institutions division at International Food Policy Research Institute.