Cereal commodity prices fell to their lowest level in a decade in July, after six months of incremental price growth throughout 2016, according to the FAO.
The organisation’s Cereal Price Index was at 148.1 points, the lowest since 2006’s 118.9 points.
The FAO’s overall Food Price Index fell 0.8 percent in July, ending the month 1.4 percent lower than at the same time in 2015, and roughly 31 percent below highs seen in 2011.
Grains and vegetable oils led the slide, as favourable weather conditions in the US drove up projections for corn supplies and high supply in the Black Sea region drove down wheat prices. The cereal price index fell 5.6 percent in July, while the vegetable oil price index fell by 2.8 percent.
The global price trend for cereal grains would appear to reflect Q2 2016 numbers from National Council of Real Estate investment Fiduciaries’s Farmland Index, which showed a 0.06 percent depreciation in annual cropland returns, and income returns of less than 1 percent.
Meat, dairy and sugar prices increased by 1.3 percent, 3.2 percent and 1 percent respectively from June to July. However, dairy prices remain low compared with those seen in years prior to 2016. Meat prices were helped by a bounce-back in demand from China, and reduced output from Europe.
Sugar prices, which sit well above those seen over the past three years, were boosted by a more resilient Brazilian real, which has led to a reduction in exports as producers find supplying to local ethanol processors attractive again.