The organisation’s food price index, which tracks the prices of major food commodities on international markets, fell 1.5% in March, and was 18.7% lower than a year ago, while sugar was down a steep 9.2% in March compared to a month earlier. The index tracks vegetable oils, sugar, cereals, meat and dairy products.
“A sharp fall in the price index for sugar – which reached its lowest level since February 2009 – together with dipping prices for vegetable oils, cereals and meat, more than offset a rise in dairy prices and contributed to the lower index, which in March averaged 173.8 points,” the FAO said.
FAO senior economist Abdolreza Abbassian said: “The driving factor has been a plunge in sugar prices while the prices of other commodity groups also declined, with the exception of dairy.”
He said declining sugar prices had a lot to do with the situation in Brazil, the world’s largest sugar producer, which has been experiencing downward pressure on its currency – encouraging producers to export more sugar onto world markets.
The common factor for all commodities that are seeing declining prices is the supply situation, which is “more than abundant”, Abbassian said.
He added that dairy stands out as the only commodity which has seen its price increase for two months in a row.
“Limited export supplies in Oceania and Europe was the principal cause of the reversal of the falling world dairy price trend that prevailed between March 2014 and January 2015,” the FAO said.