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Global food prices down slightly: FAO

posted Oct 8, 2011, 12:29 AM by Puneet Goyal   [ updated Oct 12, 2011, 11:42 PM ]
Posted on October 07, 2011 07:22:24 PM

GLOBAL FOOD prices declined slightly in September from the previous month mainly due to lower prices of cereals, sugar and oils as a result of improved production, an agency of the United Nations (UN) said.

The Food and Agriculture Organization (FAO) also said it expects a record cereal harvest for Far East Asia, including the Philippines, but noted that floods may dampen production.The World Food Price Index dated Oct. 6 showed that the index averaged 225 points in September, down by five points from the previous month. The September food price index, however, is still higher compared to the 194 points in the same month last year, the FAO said.

"The recent decline reflected decreases in international prices of most commodities included in the index with prices of sugar, grains, and oils falling most," the UN agency said.It said that the cereal price index averaged 245 points in September, three points lower from August. The FAO noted that the cereal price index has been on a downward trend since April amid expectations of a rebound in output.

In another report released on Oct. 6 titled "Crop Prospects and Food Situation," the FAO said that it has raised its estimate for world cereal production to 2.310 million tons in 2012 from 2.307 million tons this year based on an estimate issued in September. The outlook hinged mainly on improved expectations for wheat and rice crops.
It said the latest world cereal production estimate is 3% higher than the 2010 to 2011 production.

"A return to normal weather in North Africa and eastern parts of Europe after drought last year is behind most of the increase for wheat and coarse grains, while the main paddy producing countries in Far East Asia account for the bulk of the growth expected in rice output," the FAO said.It said that it expects a record-harvest of cereal crops in the Far East Asia at 1.16 billion tons, a 2.8% rise from 2010.

The Philippines, it said, as well as other countries in the region like Cambodia, India, and Timor Leste are expected to post significant gains in harvests."However, severe localized flooding in Bangladesh, Democratic People’s Republic of Korea, India, Lao People’s Democratic Republic, Pakistan, Thailand and the Philippines, may dampen actual harvest of the current monsoon season," it said.

The FAO said that apart from cereal prices, sugar prices likewise posted a decline with the sugar price index averaging 379 points in September, 3.8% lower than the 394 points in August.Lower sugar prices have been attributed to positive production prospects in Europe, India and Thailand as well as better-than-expected output in Brazil, the world’s largest sugar producer.

The oils and fats price index was down 2.3% to 238 points in September from the previous month, reflecting good production and comfortable stock levels.The dairy price index which averaged 218 points in September was slightly down from the 221 points in August, while the meat price index which was at 175 points, also slipped slightly from the previous month’s 176 points.Sought for comment on Friday, Benjamin E. Diokno, economist from the University of the Philippines, said in an email that as a result of the recent typhoons that left damage to crops, a spike in food prices may be seen between now and in the next few weeks.

Agriculture Undersecretary Antonio A. Fleta said on Wednesday that the damage left by typhoons Pedring and Quiel (international names Nesat and Nalgae, respectively) which hit the country last week reached nearly P12 billion with the bulk of the damage accounted for by palay crops.Towards the end of the year, however, Mr. Diokno said that food prices are not expected to shoot up."The usual price surge during the holidays may not come because of depressed consumer demand because of hard times -- peso value of remittances is either constant or slightly down and because of the stubbornly high unemployment and underemployment," he said. -- Louella D. Desiderio