World food prices have fallen to their lowest in more than a year, depressed by falling corn values, and a drop in vegetable oil and sugar prices to their lowest since 2010, the United Nations said.
A food price index kept by the UN food agency, the Food and Agriculture Organization, fell for a third consecutive month in July to reach its lowest since June last year, and down 13% on its all-time high reached early in 2011.
Price declines last month were particularly sharp in grains, "mostly reflecting falling corn prices as favourable weather boosted hopes of a significant production increase in several leading corn-producing countries", the FAO said.
Corn futures in Chicago are trading at their lowest since late 2010, depressed by expectations of a huge US harvest, which are being supported by data from crop tours from Lanworth and MDA.
'Ample export availabilities'
However, vegetable oil prices extended a long-running decline to fall to their lowest since July 2010.
"Soy oil values have fallen in response to ample export availabilities, especially in Argentina, combined with weak demand, including from the biodiesel sector," the FAO said, also flagging good "good soybean crop prospects in the US".
Weakness in palm oil prices was attributed to "the combination of ample production and lower than expected import demand, most notably by China".
Sugar prices dropped to their lowest since June 2010, in a drop which the FAO said reflected "anticipated large surplus production in major producing areas, notably in Brazil, the world's largest sugar producer and exporter.
"Declining ethanol prices in Brazil also provided an incentive to convert more sugarcane into sugar instead of ethanol, which put additional downward pressure on international sugar prices."
The report came hours after Noble Group, the Singapore-based agricultural trading group with substantial Brazilian sugar operations, cautioned that sugar prices were too low to offer more than "marginal" returns even to efficient producers.