The United Nations Food and Agriculture Organisation's (FAO) Food Price Index, has declared the fall of food price index for the third consecutive month in the last six months.
FAO in its monthly assessment and analysis of prices of 55 food commodities indicated a drop of 1.8 per cent from 205 points in May, thereby dropping in three consecutive months from April 2012.
NaijaAgroNet recalls that a four-point drop in June brought the index to 201 points from a revised level of 205 points in May 2012; hence the index now stands at 15.4 per cent below its peak in February 2011.
A press statement made available to NaijaAgroNet, FAO affirmed that the average prices of all commodity groups in the index were below May levels, with oils and fats recording the largest drop.
The United Nations' agency attributed the continuous drop in food price index to the continuous economic uncertainties. That adequate food supply prospects kept the index down although growing concerns over dry weather sent prices of some crops higher toward the end of the month.
NaijaAgroNet learnt that prices of food commodities have started rising again recently as a result of adverse weather and this may affect the rebound of the food price index in July.
FAO’s new production forecast for world cereal production in 2012 stands at 2 396 million tonnes, still a record level and against the previous forecast of 2,327 million tones.
Assessment by FAO also shows an adequate supply and demand situation in 2012/13 season which is traceable to the abundant supplies of rice as well as sufficient exportable supplies of wheat and coarse grains.
But grain prices were very volatile in June due to continuing dryness and above-average temperatures in most of the major maize growing regions of the United States. Adverse weather is diminishing prospects of an improvement in the maize supply situation and FAO is monitoring the development closely.
Commenting on the June Food Price Index, FAO Director-General José Graziano da Silva said the agency has been actively involved in studying food price volatility and identifying appropriate policy responses.
“Our analytical work is helping to deepen the understanding of the nature, causes and impacts of volatility and of what governments and other stakeholders can do about it,” da Silva asserted.
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