Food prices down again, reaching lowest level in 55 months: FAO

World food prices dropped again in February, reaching their lowest point in nearly five years despite increases in milk prices, the United Nations Food and Agriculture Organization said Thursday.

The overall FAO Food Price Index fell 1.0 percent compared to January, the tenth time prices dropped in 11 month, interrupted by a 0.1 percent rise last November. The index averaged 179.4 points for the month and is now lower than any time in the last 55 months, and 14 percent below levels in February 2014.

A strong harvest for grains and cereals, the largest component in the index, was again a driving factor, with that sub-index falling 3.2 percent. Wheat asserted the most downward pressure among grains and cereals, while rice prices held stable despite an increase in prices for aromatic rice.

Sugar prices fell the most, down 4.9 percent for the month, pushed by speculation that Brazil could have a stronger-than-expected harvest due to favorable weather conditions there.

Meat prices fell 1.4 percent, while oils were up 0.4 percent driven by palm oil prices, which rose in part because of floods in Malaysia.

The most important upward pressure on the overall index came from dairy prices, which surged 4.6 percent higher for the month based on seasonal factors and weak experts from New Zealand.

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 April 2. Endit