São Paulo – The food prices calculated on a monthly basis by the United Nations Food and Agriculture Organization (FAO) declined in July for the third straight month. The FAO Food Price Index scored 205.9 points in July, down four points from June and seven points, or 3.3%, from July 2012. According to the FAO, the decline is mostly owed to lower prices of soy, other grains, palm oil and sugar. <\/p>\n
The oil price index had its lowest score of the last three years last month. One of the reasons cited by the FAO is a strong supply of soy oil in Argentina, the prospects of a good soy crop in the United States, and weaker global demand. The situation repeats itself in the case of palm oil, which had a weak demand, especially in China, and high output. <\/p>\n
Regarding grains, the FAO notes that the price index score in July was down 13% from July 2012, and claims the decline was driven by a sharp reduction in maize prices, because crops were good and output was up. The FAO report shows that wheat price is also down, though by a lower rate than other grains, due to the high export volumes. The price of rice has shown higher variation from region to region: it remained low in Thailand and high in Vietnam.<\/p>\n
Dairy prices have also dropped, but by a lesser rate than in the two prior months, due to reduced availability in Oceania and stagnant production in traditional dairy exporting countries in Europe and South America, plus the United States. The FAO has also reported that meats prices have remained level from June because poultry and pork prices dropped, but sheep and beef prices rose. <\/p>\n
“Overall, there are signs that international prices for meat are weakening in the face of reduced import demand – especially from Asian countries – reflecting production growth and, in some cases, a build-up of domestically produced meat inventories,” according to the report. <\/p>\n
The price of sugar dropped by an average of 1.5% in July, the fourth consecutive month of decline. The FAO ascribes this fact to surplus production in the leading producing areas, most notably Brazil. In the latter country, low ethanol prices, according to the UN agency, have made it more competitive for companies to process sugarcane instead of fuel. That, according to the FAO, has helped alleviate pressure on international prices. The FAO price index is calculated based on the prices of 55 commodities, and their shares in exports.<\/p>\n
*Translated by Gabriel Pomerancblum<\/strong><\/p>\n