FAO says food prices down again in January due to weak euro, low oil prices

World food prices fell again in January, the United Nations Food and Agriculture Organization (FAO) said Thursday, with the weak euro and low oil prices playing key roles.

The overall FAO Food Price Index fell 1.9 percent compared to January, the ninth time in 10 months prices fell, with the one increase a mere 0.1 percent rise in November. The index averaged 182.7 points for the month.

A strong harvest for grains and cereals, the largest component in the index, was also a factor. That sub-index fell 3.6 percent compared to December, pushed by a 7-percent decrease in wheat prices. Rice was the only part of that index to hold its ground, with reductions in production in India, Indonesia, and Thailand.

The index for oils and fats fell 2.9 percent in January compared to December, while prices for meats fell 1.6 percent. The indexes for dairy products and sugar were stable and little changed compared to the previous month.

FAO predicted food prices could continue to drop: officials predicted strong harvests for grains and cereals in 2015, following a bumper crop last year.

The weak euro puts downward pressure on prices by making European exports cheaper, while inexpensive oil prices cut down on costs associated with transportation.

The next installment of the FAO index, which is based on a basket of 55 goods and 73 price quotations in five major food commodity groups, will be released March 5. Endit