The continued sluggish global economy has one good benefit, world food prices continue to decline. The United Nations Food and Agriculture Organization (FAO) says their Food Price Index fell for the third month in a row in June hitting the lowest level since September of 2010. The Index compares the prices of 55 basic food items around the world and is now 15.4 percent below the record high set in February of 2011. Those record high prices contributed to the so-called “Arab Spring” leading to the downfall of governments in Tunisia, Egypt and Libya.
While the average prices of all commodity groups in the Index were down in June, officials caution things seem to be turning-around as dry weather concerns in the U.S. have pushed commodity prices higher.
The FAO lowered its forecast for 2012 world cereal production by more than 23 million metric tons from the May forecast although the lower number would still be a record.
Meanwhile abundant supplies of rice and “sufficient exportable supplies” of wheat and coarse grains around the world should be adequate to meet demand.
Read the FAO report here: