The FAO has released the latest version of its Food Price Index . The June Index was almost 2 points below May levels, but remained 11 points higher than in June 2012. The slight decline came mainly from sugar and dairy prices.
The Cereals Price Index also declined slightly by 2.5 points in June on expectations of bumper global crops. Tight coarse grain supplies are expected to continue until harvests in the fall, however, and the Index remains 14 points above its June 2012 level.
The Oils/Fats Price Index is down marginally from May and is at its lowest point (198 points) in six months. A rise in soyoil export availability in South America was a driver of this decline. However, palm oil prices remain steady due to slow production growth and falling supplies in Southeast Asia.
The Sugars and Dairy Indices both declined significantly in June, by 7.5 points and 10.8 points, respectively. While the Meats Index rose by 3.4 points, signs point to reduced import demand, particularly from Asia, that could cause international meat prices to lose strength in the coming months.
The AMIS Market Monitor also released its latest edition this week. The Monitor is seeing favorable production prospects for the 2013-2014 season, with larger harvests for maize in particular that will contribute to a significant increase in world cereal stocks. Increased supplies could lead to lower and more stable prices. The FAO's quarterly Crop Prospects and Food Situation report also states that global cereal production is expected to reach historic highs in 2013.