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06/03/2010

News / Global food prices plummet, UN reports

3 June 2010 – International prices of key food staples dropped in the first five months of this year, driven largely by plummeting prices of cereals and sugar, according to a new United Nations Food and Agriculture Organization (FAO) report.

The FAO Food Price Index – the average of commodity prices, including meat and dairy – averaged 164 points in May, down from 174 in January and substantially less than its peak of 214 reached in the spring of 2008.

Sugar prices have plunged by half from their peak earlier this year due to possible significant production increases.

But the Food Outlook report said that despite the fall in the Index, the cost of the typical food commodity basket globally today is still nearly 70 per cent higher than it was between 2002 and 2004.

“The 2008-2009 food prices boom spurred plantings and production of many crops, which has resulted in a recovery in inventories and boosting stocks-to-use rations, a tendency likely to prevail in 2010/11,” the publication said.

The global drop in prices, it cautioned, masks the ongoing high costs of food imports due mainly to higher expenditures on non-cereal products, including dairy products and vegetable oils.

The new report also predicted continued growth in cereals, with world production this year on target to match the record set in 2008.

http://www.un.org/apps/news/story.asp?NewsID=34900&Cr=fao&Cr1=

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