Based on the prices of a basket of internationally-traded food commodities, the FAO Food Price Index averaged 203.9 points in July 2014, down 4.4 points (or 2.1%) from a revised value in June and 3.5 points (or 1.7%) below the July 2013 level.
"The lingering decline of food prices since March reflects much better expectations over supplies in the current and forthcoming seasons, especially for cereals and oils, a situation that is expected to facilitate rebuilding of world stocks," said FAO senior economist Concepción Calpe.
In contrast, meat prices rose for the fifth consecutive month in July, and those for sugar remained firm. The fall in quotations for grains, oilseeds, as well as dairy products pushed down the FAO Food Price Index to its lowest level since January.
"Livestock product markets have their own dynamics: in the case of meat, beef in particular, many exporting countries are in a herd rebuilding phase, which is limiting availability for exports and sustaining prices," Calpe said. "As for dairy products, supplies available for trade appear to be abundant, which, along with a faltering import demand, has weighted on July's quotations," she added.
The FAO Cereal Price Index averaged 185.4 points in July, down 10.7 points or 5.5% from June and as much as 36.9 points or 16.6% below the level one year ago.
In particular the fall in international prices for maize (down 9.2% from June) and wheat (down 5.8%) reflected excellent production prospects as well as expected abundant exportable supplies in the 2014-15 marketing season.
In contrast, rice prices edged marginally higher, on renewed import demand, especially as Thailand's sales from public reserves remained suspended.
The FAO Vegetable Oil Price Index averaged 181.1 points in July, down 7.7 points or 4.1% from June. The decline continued to be primarily driven by falling soy and palm oil prices.
Soy oil values fell mainly in response to record crop prospects for the United States as well as abundant supply in South America while palm oil quotations eased on persisting strength in Malaysia's currency and slow global import demand. Prices for rape and sunflowerseed oil also weakened, reflecting ample crop prospects for 2014-15.