Global food prices dipped to their lowest level since July 2010, continuing a steady decline, the United Nations' Food and Agriculture Organization (FAO) said, in a statement released Thursday. The fall was prompted by improved supplies, falling crude oil prices and a strong dollar, according to the FAO.
The FAO Food Price Index, which measures monthly changes in the international prices of a basket of food commodities, fell by 1 percent since January and 14 percent over the last year. The index stood at 179.4 points in February, down from 181.2 points in January and 208.6 points in February 2014.
“Its ongoing decline reflects robust supply conditions as well as ongoing weakness in many currencies versus the U.S. dollar, which appear set to continue,” Michael Griffin, FAO’s dairy and livestock market expert, said, in the statement. In addition, high crop production around the world and low crude oil prices also helped cap global food prices.
“The first thing to flag is the favorable outlook for production of a number of crops in 2015,” Griffin added. “Stocks are also very strong for most cereals.” Cereal stocks at the end of the 2014-15 crop season are now forecast to reach a 15-year high of 631 million tons, up almost 8 million tons since last month.
The FAO Cereal Price Index averaged 171.7 points in February, down over 3 percent from January. “The decline was most pronounced for wheat, reflecting continued improvement in the 2015 wheat production prospects, amid already large world inventories,” FAO said, in the statement.
However, the FAO Dairy Price Index rose for the first time in a year, driven by a drought in New Zealand and limited export supplies from Australia.