5 July 2012, Rome - The FAO Food Price Index fell for the third consecutive month in June 2012, dipping 1.8 percent from May to its lowest level since September 2010. The four-point drop in June brought the index to 201 points from a revised level of 205 points in May 2012.
The index now stands at 15.4 percent below its peak
in February 2011. The average prices of all commodity groups in the
Index were below May levels, with the largest drop registered for oils
Continued economic uncertainties and generally adequate
food supply prospects kept the index down although growing concerns
over dry weather sent prices of some crops higher toward the end of the
Food commodity prices have started rising again recently,
mostly because of adverse weather and this may result in a rebound of
the Food Price Index in July.
FAO also lowered its forecast for
2012 world cereal production by more than 23 million tonnes from May,
which is likely to result in a smaller build-up of global stocks by the
end of seasons in 2013.
FAO’s new forecast for world cereal production
in 2012 stands at 2 396 million tonnes, still a record level and 2
percent up from the previous high registered last year.
Supply and demand situation adequate
to FAO’s latest assessment, the overall supply and demand situation in
2012/13 remains adequate thanks to abundant supplies of rice, a leading
food staple, and sufficient exportable supplies of wheat and coarse
But grain prices were very volatile in June due to
continuing dryness and above-average temperatures in most of the major
maize growing regions of the United States. Adverse weather is
diminishing prospects of an improvement in the maize supply situation
and FAO is monitoring the development closely.
High-level event on volatility and speculation
issue of swinging food prices will be discussed by a high-level event
on “Food Price Volatility and Price Speculation” to be held at FAO on
Friday, 6 July. Speakers will include Leonel Fernández, President of
the Dominican Republic who will give a keynote address, and FAO
Director-General José Graziano da Silva.
“FAO has been actively
involved in studying food price volatility and identifying appropriate
policy responses,” said Graziano da Silva. “Our analytical work is
helping to deepen the understanding of the nature, causes and impacts of
volatility and of what governments and other stakeholders can do about
The FAO Food Price Index is a measure of the monthly change in average international prices of a basket of 55 food commodities.