The Food and Agricultural Organisation (FAO) has stated that the international prices for major food commodities saw a modest decline in July following five consecutive months of increament.

The FAO Food Price Index (FPI) is a trade-weighted index tracking international market prices for five major food commodity groups which averaged 161.9 points in July 2016, slipping 0.8 per cent (1.3 points) below its level in June and 1.4 per cent below its level of July 2015.

The overall decline of the index was largely caused by drops in international quotations of grains and vegetable oils, more than offsetting firmer dairy, meat and sugar prices.

The FAO Cereal Price Index fell 5.6 per cent from June, led by a sharp drop in maize prices due to favourable weather conditions in the key growing regions of the United States – the world’s largest maize producer and exporter. Wheat prices also fell in July mainly driven by large global supplies and prospects for abundant export availabilities from the Black Sea region. By contrast, rice prices strengthened somewhat as dwindling availabilities underpinned Basmati and long-grain quotations.

Falling for the third consecutive month, the FAO Vegetable Oil Price Index dropped 2.8 per cent from its level in June. The slide was mainly driven by palm oil, which price dropped to a 5-month low, reflecting a seasonal recovery in production in South East Asia, combined with subdued global import demand. International prices for soybean, sunflower and rapeseed oil also eased on better than earlier anticipated supply prospects.

The FAO Dairy Price Index rose by 3.2 per cent from the previous month with butter prices seeing the sharpest rise in the group.  Yet, they remain at very low levels compared to recent years. The FAO Meat Price Index increased by 1.3 per cent from its revised June value.

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