CORRECTED-Macquarie index aims to be lead indicator of food inflation
(In Dec. 4 story, deletes index being published every Monday in final paragraph)
LONDON Dec 4 (Reuters) - Macquarie Commodities Research has created a new global agricultural commodity index designed to indicate the future level of food inflation, it said on Wednesday.
The index tracks the prices of futures contracts for 28 different agricultural commodities and is consumption weighted.
Macquarie plan to put its individual price forecasts into the index to provide an indication for food retailers on where their input costs are headed or economists looking at food inflation prospects.
"It is intended to become a lead indicator that describes where food inflation is heading and suggest the health of the food and agricultural industries," analyst Kona Haque said.
Macquarie, which is part of Macquarie Group, said its forecasts currently indicated a 10 percent decline in the index in 2014 following an 11 percent fall this year.
"We expect food commodities prices overall to remain bearish for the next two years, barring adverse weather-related supply risks, and therefore for food deflation to continue until 2015," Haque said.
Indexes of food commodity prices produced by the World Bank and the United Nations Food and Agriculture Organization (FAO) are designed to indicate current, not future, prices.
The main categories in the Macquarie index are staple grains, vegetable oils, animal feed, sugar and beverages and other food.
There is no direct meat component, with the index seeking to reflect future trends through animal feed prices. (Reporting by Nigel Hunt; Editing by Anthony Barker)