Global food prices drop 2.1% in July

Global food prices fell by 2.1% in July from the previous month's level due to sharp decline in international rates of grains, oilseeds and dairy products, according to the United Nations food agency FAO.

Global food prices measured on the FAO food index declined for a fourth consecutive month in July.

The index averaged at 203.9 points in July, down by 2.1% from June and 3.5% below July 2013, the Food and Agriculture Organisation (FAO) said in a statement.

"While meat prices rose for the fifth consecutive month and sugar remained firm, sharp declines in grains, oilseeds and dairy quotations pushed down the FAO Food Price Index to its lowest level since January 2014," the FAO said.

The FAO price index measures monthly price changes for a basket of cereals, oilseeds, dairy products, meat and sugar.

According to FAO, the recent sharp slide in cereal prices reflected significant fall in international prices of maize and wheat, a reaction to excellent production prospects in many major producing countries.

On the other hand, rice prices edged marginally higher, on renewed import demand, especially as Thailand's sales from public reserves remained suspended.

Among vegetable oils, soy oil prices have fallen mainly in response to record crop prospects for the US as well as abundant availabilities in South America.

Palm oil quotations eased on persisting strength in Malaysia's currency and slow global import demand. Prices for rapeseed and sunflowerseed oil also weakened, reflecting ample crop prospects for 2014-15.

Dairy products prices continue to fall reflecting both, reduced import demand and abundant export availability but meat prices rose in July.

Sugar prices remained marginally up in July. Over the past three months, international sugar prices have been relatively volatile, with no clear direction amid uncertainty associated with sugar production in Brazil, the world's largest producer and exporter, the FAO added.