Friday, October 10, 2014

World prices decline to four-year low

The index of world food prices declined again in September, the sixth monthly decline in a row.

It’s now at 191.5 points, the lowest since 2010.

Meat prices, however, have increased to the highest levels since 1990. Beef prices are up, but pork prices have started to decline.

“Sugar and dairy weakened the most, followed by cereals and oils,” the Food and Agriculture Organization (FAO) of the United Nations wrote.

“Among the underlying factors, the U.S. dollar’s broad appreciation continued to weigh on all international commodity prices.”

For September, the index was six per cent lower than a year ago; the monthly figures have been lower than the same month a year earlier for 15 months in a row, the longest persistent decline since June, 2000.

A gauge of dairy prices dropped 6.5 percent from August, with all products in the index falling, particularly skimmed milk power, the FAO said. 

New Zealand and Australia had more to export and Europe switched from cheese to butter and skim milk powders after sales to Russia were blocked.

The grain price index fell 2.5 percent to 177.9 points, with “good production” and large quantities available for export weighing on prices for wheat and corn, according to the UN agency.

An index of vegetable oil prices declined by 2.8 percent to 162 points in September amid an outlook for ample palm-oil production in Southeast Asia and better-than-expected soybean yields in the U.S.

Sugar prices declined 6.6 percent to about 228 points as world production is expected to exceed consumption.

A gauge of meat costs rose to 207.8 points, led by export prices for Australian beef.

Prices for pork are falling as production recovers from disease, the FAO wrote.