An index that contains 55 different foods items fell from December’s 206.2 to 203.4 last month. The drop put world food prices at a 19-month low, as costs for all foodstuffs from grains to sugar dropped amidst large global supplies, said the Food & Agriculture Organization of the United Nations.
The FAO, based in Rome, released the information on Thursday online. The drop in the index was 4.5% from one year ago and is it’s lowest since June of 2012.
Corn was the S&P GSCI’s worst performer of the 24 commodities in 2013 dropping by 40% thanks to a record crop globally. Sugar fell by 16% in 2013 in New York and this year has extended that slid by another 1.6% as world supplies outpace the demand across the globe.
In another report, the FAO has said that production of world grain will be more than previously thought with a record 2.5 million metric tons.
Bumper crops during 2013 helped increase inventories, which along with large supplies for export, have forced down the prices internationally of cereals to far below the 2012 high levels, said the FAO.
Early 2014 prospects are also favorable for crops, forcing most cereals to fall even further over the last few weeks.
The grain index for FAO dropped from 191.5 to 188.4 in January, according to the latest report. The gauge for sugar prices by FAO dropped by 5.6%, while costs of vegetable oil fell by 3.8% and prices of meats dropped by over 0.9%. FAO announced that the only prices to rise were dairy costs which climbed by over 1.4%, said FAO.
The dairy cost increase was 29% higher than the same period one year ago. Widespread drought has reduced output in New Zealand, the largest diary exporter in the world.
The Department of Agriculture in the United States projects that the global inventories for dairy products from milk powder to cheese would fall in 2014 as the demand begins to outpace supply.
Imports into China of powdered whole milk, which often times is used in baby’s formula have spiked by 14-fold over the past 6 years, show new data from the USDA.
