Global food prices fell to their lowest level in eight months in May. The United Nations Food and Agriculture Organization (FAO) credits favorable supplies, growing global economic uncertainty and a stronger U.S. dollar for a 4.2 percent decline in the monthly food price index. The index measure the price of 55 basic food items. Dairy prices declined 12 percent, sugar dropped 9 percent and fats and oils declined 7 percent from April.
The FAO raised the forecast for world cereal production by 48.5 million metric tons in May due in large part to the early corn planting season in the U.S. Global rice production is expected to increase 2.2 percent from last year due to more hectares planted in Asia. Wheat production is estimated to be down about 3 percent this year. Overall predictions are 2012 world cereal production will be 2,149 million metric tons, 3.2 percent above the record set in 2011. 2012-2013 global grain stocks were raised to 548 million tonnes.
The Global Food Price Index hit an all-time high in February of 2011and contributed to the civil unrest which led to the changes in government in Egypt, Libya and Tunisia.
Read the full FAO report here: