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3 March 2014 | Gurjit Degun
International food prices have continued to decline, falling by 3 per cent between October last year and January.
The World Food Bank’s Food Price Watch report reported the recent decline is half of that observed between June 2013 and October 2013. The food price index in January 2014 was 11 per cent lower than a year ago, and 18 per cent below the all-time peak in August 2012.
The Bank said the fall in the prices of grains and in the ‘other’ category – mostly sugar – have driven the overall drop in food prices in the last quarter. Sugar prices experienced “marked decreases” of 16 per cent, and the price of soybean oil fell by 4 per cent.
Global wheat prices fell by 15 per cent between October 2013 and January – the largest decline among grains. The price of Thai 5 per cent rice increased by 3 per cent, and the cost of Vietnamese rice increased by 11 per cent. “In contrast, export prices of Indian rice and lower quality Thai rice declined as a result of large available supplies, even though public procurement programs partially limited such declines,” the report added.
The World Bank said the “favourable [weather] conditions” have confirmed previous projections of record grain harvests, “resulting in further but lower price declines” between October 2013 and January 2014.
The report said: “Record harvests in wheat, maize and rice, increasing availability of supplies, and stronger global stocks have continued to drive down prices. Yet, international prices are still not overly far from their historical peak.
“Upward pressures from weather concerns and increasing demand, and downward risks from the effects on export prices of an increasingly contested Thai rice procurement programme continue to require close monitoring.”