World food prices slump to 15-yr lows

World food prices slump to 15-yr lows

2014-10-09 19:30

Paris - Bumper harvests and big stockpiles of food are helping to drive world food prices down to the lowest levels for about 15 years, the UN Food and Agriculture Organisation reported on Thursday.

The commodities showing the biggest price falls were sugar and dairy produce, followed by cereal and oil prices.

World food prices fell for the sixth month running in September, marking "the longest period of continuous decline" since the late 1990's, the FAO said releasing its monthly food price index.

The price of meat had firmed but could be stabilising, it said.

"World wheat production in 2014 is forecast to reach a new record," the FAO said.

Although the production of rice could fall slightly this year, stockpiles were "huge" and were enough to cover one third of expected consumption in 2015 and 2016.

But the Ebola virus outbreak in West Africa was a "hot spot" of concern since it was disrupting markets and farming activities "affecting food security and large numbers of people", the FAO said in another quarterly report on crop prospects and the food situation.

Also "irregular rains in several areas of the Sahelian belt will result in mixed production prospects," it warned.

The food situation in eastern Africa was improving with the beginning of harvesting and although regional food prices were steady or falling, they were at record high levels in Somalia and Sudan.

The organisation also published its latest edition of a biannual "Food Outlook" report, saying "bumper harvests and abundant stockpiles are key factors helping drive down international cereal prices."

It said: "Food markets are more stable and prices for most agricultural commodities are sharply lower than they have been in recent years."

World production of cereals was expected to total 2.5 billion tonnes this year, it said. This was an upward revision of 65 million tonnes from the initial FAO forecast in May.

And world inventories should rise to the highest level for 15 years by the end of the harvest season in 2015.

"Global output of oil seeds is also forecast to exceed last season's record due to further expansion of soybean production," the FAO said.

Production of cassava was set to reach a record high level, boosted by output in Africa, and production of sugar would also rise in 2015-2016.

"Meat production is set to grow moderately in 2014, but not enough to ease prices from their current high levels, while milk production continues to grow steadily in many countries."

The FAO said that the global production of fish was also rising, owing largely to fish farming.

Overall, the amount of money spent by all countries on importing food would exceed €783bn this year for the fifth year in a row.