ROME (Reuters) - Global food prices fell in January, led by declines in the costs of sugar, vegetable oils, and cereals, the United Nations food agency said on Thursday, adding that robust inventories should contain prices in coming months.
The Food and Agriculture Organization’s (FAO) price index, which measures monthly price changes for a basket of cereals, oilseeds, dairy, meat and sugar, averaged 203.4 points in January.
That was down from a revised 206.2 in December, originally reported as 206.7.
“The cereals, oils, and sugar seem to have one thing in common - a much better supply situation than there has been in some years,” FAO senior economist Abdolreza Abbassian told Reuters by telephone.
“Prices are at more moderate levels and are more stable than in recent years, and in supply terms there is nothing on the horizon that says the situation will change,” he said.
Among the categories in the index, only dairy prices rose, FAO said, while meat prices declined marginally. Dairy and meat prices are more demand driven and less predictable that crops, Abbassian said.
Overall food prices declined in 2013 overall compared with the two previous years, and are down significantly from peaks reached in 2011.
Also on Thursday, FAO said that it sees cereal output higher than forecast in a December report.
Cereals output, including milled rice, is seen at nearly 2.502 billion tons at the end of the 2014 crop season, 1.7 million tons more than previously forecast.
Global cereal stocks at the end of the season are forecast at 573 million tons, nearly the same level as forecast in December. The forecast for wheat output rose to 714.2 million tons, up marginally from a previous estimate of 710.8 million.
Reporting by Steve Scherer; editing by Jason Neely