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MANILA – Global food prices fell for a third month in June, but would pick up again this month because of adverse weather, the Food and Agriculture Organization said on Friday.
In a report, FAO said its Food Price Index averaged 201 points last month, down by four points from an upwardly revised 205 points in May, and still the lowest since September 2010.
“After the third consecutive month of decline, the index now stands at 15.4 percent below its peak in February 2011,” FAO said.
Continued economic uncertainties and generally adequate food supply prospects kept the index down, but growing concern over dry weather sent prices of some crops higher toward the end –June.
The FAO index is a measure of the monthly change in average international prices of a basket of 55 food commodities.
The Cereal Price Index averaged 221 points in June, unchanged from May and down 45 points from its peak of 265 points in April 2011.
FAO said the overall supply and demand situation in 2012-2013 remains adequate because of the abundant supply of rice and sufficient exports of wheat and coarse grains.
“After a generally subdued situation during the first half of the month, markets moved up in the second half amid deteriorating crop prospects, most notably for maize in the United States,” the UN agency said.
“The increase in maize prices underpinned wheat values, which were already experiencing some increases on downward adjustments to production forecasts in the Russian Federation. Rice prices remained largely steady, with large differences persisting across origins,” it added.
FAO cut its 2012 forecast for world cereal production by more than 23 million tons, likely resulting in a smaller build-up of global stocks by the end of the season in 2013.
The latest forecast for world cereal production now stands at a record 2.396 billion tons, two percent higher than the previous high.
The Oils/Fats Price Index averaged 221 points in June, down for the second consecutive month. After falling by 6.8 percent in May, the index fell by another 5.6 percent in June notwithstanding prospects for further supply and demand tightness for oil crops through 2013.
The Meat Price Index averaged 174 points in June, down 1.3 percent from May. Prices of all the meat categories fell, because of faltering import demand and a weakening of currencies in some major exporting countries.
The Dairy Price Index averaged 173 points in June, down 1.5 percent from the revised May value and the fifth consecutive monthly decline.
The index slide was mainly on account of butter and whole milk powder, prices of which registered large drops, while those of skim milk powder and casein firmed somewhat. Since the beginning of the year, dairy prices have shed 16.1 percent of their value.
The Sugar Price Index averaged 290 points in June, down 5 points from May and as much as 68 points below the level seen in June 2011. Sugar prices declined for the fourth month in a row, reflecting larger availabilities in India, the EU and Thailand, new supplies from Brazil reaching the market, and declining crude oil prices.
However, prices regained some strength towards end- June on the back of unfavorable harvestconditions in Brazil, the world’s largest sugar exporter.
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