ROME - For the third consecutive month, the Food and Agriculture Organization of the United Nations (FAO) Food Price Index fell in June, shrinking 1.8 percent from May to its lowest level since September 2010. FAO relays the four-point drop in June brought the index to 201 points from May’s revised level of 205 points.
The FAO Food Price Index measures monthly change in average international prices of a basket of 55 food commodities. At present, the index is 15.4 percent below its peak, which was totaled in February 2011. As a result, the average prices of all commodity groups in the Index were below May levels; the largest decline was for oils and fats.
FAO’s Oils/Fats Price Index averaged 221 points in June, which is down for the second-consecutive month. After slipping 6.8 percent in May, the index fell by another 5.6 percent in June. The recent decline in international oils/fats prices was caused primarily by larger-than-expected oilcrop plantings in northern hemisphere countries plus a sizeable decline in crude-oil prices, which has weakened demand for vegetable oils from the energy sector.
FAO’s Meat Price Index averaged 174 points in June, down 1.3 percent from May. Prices of all the meat categories dropped due to a faltering global import demand and a weakening of currencies in some major exporting countries. However, meat prices in the first six months still averaged 1 percent higher in 2012 than in 2011, bolstered by lingering high bovine meat quotations.
In June, FAO’s Dairy Price Index averaged 173 points, down 1.5 percent from the revised May value and the fifth-consecutive monthly drop. The June index decrease was primarily due to butter and whole milk powder, whose prices registered large drops, while skim milk powder and casein stabilized somewhat. Dairy prices have shed 16.1 percent of their value since the beginning of 2012.
FAO’s Sugar Price Index averaged 290 points in June, down 5 points (1.6 percent) from May and as much as 68 points (19.0 percent) below its level in June 2011. Sugar prices fell for the fourth consecutive month, reflecting larger availabilities in India, the EU and Thailand, new supplies from Brazil reaching the market plus falling crude oil prices. Prices regained some strength towards the end of June due to unfavorable harvesting conditions in Brazil, the world’s largest sugar exporter.