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Business

Global food prices hit near-six-year low

The United Nations Food and Agriculture Organization has reported a continued decline in global food prices. It said the drop was driven by a favorable outlook for this year's harvests in most regions of the globe.

The UN's Food and Agriculture Organization (FAO) said Thursday that major food commodity prices eased again in May, hitting an almost six-year low.

The

FAO Food Price Index

was down 1.4 percent from the previous month and as much as 20.7 percent lower than in May 2014.

The index is a trade-weighted barometer that tracks prices on international markets of five major food commodity groups, notably cereals, meat, dairy products, vegetable oils and sugar.

FAO upgraded its global production forecast of wheat and rice, anticipating bigger harvests in China and Mexico, but also more abundant wheat harvests in Africa and North America.

Bumper harvests

Global cereal production for the whole of 2015 was predicted to reach 2.5 billion tons, just 1 percent below last year's record.

The UN body stated that May's drop in global prices was driven mainly by a 3.8-percent monthly decline in the cost of cereals as well as by a 2.9-percent dip in dairy product prices.

But the picture was not heterogeneous at all in May, the organizaton emphasized. It cited the sugar price index which bucked the trend and rose by 2.0 percent in the month under review.

hg/cjc (Reuters, FAO website)

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