Global food prices declined in July 2014, with dairy prices helping lead the way, according to the latest United Nations’ Food and Agriculture Organization (FAO) Food Price Index.

The July 2014 FAO Dairy Price Index dropped 4.4% from June – the fifth consecutive month-to-month decline – and was 7.2% less than July 2013. Prices continue to fall reflecting both reduced import demand and abundant export availability. Following strong production growth this year, export supplies have increased in the EU, while the outlook is for a favorable start to the new season in Oceania. As for imports, purchases of butter by Islamic countries declined during Ramadan, as did those by the Russian Federation. For whole milk powder, limited purchases by China, the largest importer, contributed to a price drop. Quotations for cheese and skimmed milk powder also moved lower.

The FAO Food Price Index is a measure of the monthly change in international prices of a basket of five food commodities – cereal, vegetable oil, dairy, meat and sugar. Overall, the FAO Food Price Index was down 2.1% from June and 1.7% below July 2013.

The July 2014 FAO Meat Price Index was up 1.8% from the revised June estimate, and 14.1% above last year. The increase was principally due to a strong rise of bovine meat prices in Australia, where herd rebuilding has reduced export supplies, and continued strong import demand in Asia, China in particular.

Looking at other commodities:

• Cereals were down 5.5% from June and as much as 16.6% below one year ago.

• Sugar was marginally up (0.4%) from June, and 8.4% higher than in July 2013.

• Vegetable oils were down 4.1% from June and the fourth consecutive monthly decline.

Source: United Nations’ Food & Agriculture Organization