For the second month in a row, the FAO Food Price Index rose on sharp increases in dairy prices and marginal increases in meat. The Index averaged 215.5 points in April, up 2 points from March. At this level, the Index is only 9 points below its highest level, seen in February 2011.

The Cereal Price Index, on the other hand, declined by 10 points in April, mostly driven by weaker maize prices. Wheat prices remained largely unchanged while rice prices fell marginally. The Oils and Fats Index declined 2 points from March, reflecting good progress on the soybean harvest in South America and a forecasted record US soybean crop in 2013.

The Dairy Index rose sharply in April, up nearly 34 points from March, due to a steep decline in New Zealand's milk production. A prolonged dry period early in the year led New Zealand farmers to cull milk cows early, leading to a drastic reduction in dairy product processing and in commercial stocks.

The latest AMIS Market Monitor was also released today, citing an expected improvement in global cereal supplies due to higher production and larger-than-expected stocks.

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