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World food prices drop in April due to falling dairy

Rome | Reuters — Global food prices fell in April, led by a sharp drop in dairy prices due to reduced buying by China and Russia and an extended season in New Zealand that boosted stocks, the United Nations’ food agency said on Thursday.

The Food and Agriculture Organization’s (FAO) price index, which measures monthly price changes for a basket of cereals, oilseeds, dairy, meat and sugar, averaged 209.3 points in April.

This was a drop of 3.5 points or 1.6 per cent from March, when food prices reached their highest level since May 2013, affected by geopolitical tensions over Ukraine, an issue FAO says has made food markets more volatile.

FAO’s cereal price index was firm at 206.9 points in April, a one-point increase from the previous month. The agency cut its world cereal production forecast for 2014 slightly to 2.458 billion tonnes, from its previous forecast of 2.521 billion tonnes.

This was 2.4 per cent lower that 2013’s record world output but would still be the second largest production ever.

FAO forecast world cereals stocks at the end of crop seasons in 2015 to be 566 million tonnes, 1.4 percent lower than opening levels. World wheat production was forecast at 701.7 million tonnes, largely unchanged from the previous month.

— Reporting for Reuters by Naomi O’Leary.


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