World food price decline slows in October-FAO

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Reuters: World food prices edged lower in October, after a series of sharp declines, as prices of oils and sugar rose while dairy and meat prices fell, the UN’s food agency said on Thursday. The Food and Agriculture Organisation’s (FAO) price index, which measures monthly price changes for a basket of cereals, oilseeds, dairy, meat and sugar, averaged 192.3 points in October, down 0.2% from September.

A view of the supermarket section of Nakumatt's shopping hall in an upper-market area of Nairobi – REUTERS The figure was 6.9% below October 2013. “After six months of decline, the index seems to be stabilising,” FAO economist Abdolreza Abbassian said. “Now we have to wait and see how demand responds to the very good supply.” FAO revised the index for September up to 192.7 points from a previously reported 191.5, which had been the lowest reading since August 2010. Abbassian said the change to September’s number was mainly due to the way meat prices are calculated, and did not change the overall picture. FAO slightly lowered its forecast for world cereals output in 2014 to 2.522 billion tons from 2.523 billion tons, 3.7 million tons below 2013’s record harvest. The agency’s world cereals stocks forecast for the end-2015 season also came in slightly lower at 624.7 million tons, versus 627.5 million tons previously predicted. Cuts to the cereals forecasts were prompted by expectations for lower maize production in China, which more than outweighed better prospects for output in the United States. Despite the cuts, FAO said maize output would reach a new record in 2014 under the current forecasts, and world cereals stocks would hit their highest level in 15 years. Expectations for larger crops in the EU and Ukraine pushed the world wheat output forecast to 722.6 million tons, 0.7% above last year’s record.