MILAN: World food prices were back down in March after hitting a two-year high last month, with cereal harvests expected to be robust and markets stable this year, the United Nations food agency said on Thursday.
Prices for food products fell for five straight years due to ample supply, a slowing global economy and a strong US dollar but in the last two months the index rose and reached 175.5 points in February, a record high since the same period in 2015.
In March the Food and Agriculture Organization’s (FAO) price index, which measures monthly price changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 171 points, down 2.8 percent compared to the previous month.
All food prices were down due to large supplies and the expectation of strong harvests, but meat ones were up 0.7 percent due to high demand for bovine and pig meat from Asia.
FAO forecasts global cereal production to be 2,597 million this year, just under the record output in 2016, because of a reduction in global wheat production and planting cuts expected in Australia, Canada and the United States.
The inching down with respect to last year is mainly due to an expected reduction in global wheat production, due to fall 2.7 percent this year.
Consumption of cereal is expected to grow by 0.8 percent in 2017 to 2,597 million tonnes as the use of grains for biofuels and to feed animals will grow less than in the past.-REUTERS