Global food prices dropped slowly in April, led by sharp declines in dairy products, sugar, and vegetable oils, according to the latest FAO Food Price Index. The Index fell 1.6 percent from March.

By contrast, the Cereal Price Index rose in April by one point. However, cereal prices remain well below (10.3 percent below) their April 2013 levels. The Meat Price Index also rose in April, with pig meat prices rising and bovine meat prices near historic highs.

The Vegetable Oils Index dropped six points, driven mostly by lower-than-anticipated demand for palm oil. Soybean prices, however, rose slightly due to tight global supplies.

The Dairy Price Index and Sugar Price Index also both fell, by 17 points and 4.1 points, respectively. The sharp drop in dairy prices can be attributed to reduced purchases from China and the Russian Federation, as well as to increased supplies for export from the northern hemisphere.

The latest AMIS Market Monitor was also released last week. The report predicts relatively stable cereal supplies for 2014-2015, despite rising global consumption. However, unfavorable weather prospects in the Black Sea region, as well as increasing chances of El Nino events, do have the potential to dampen this positive outlook and lead to increased market volatility.

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