The Rome-based agency said its Food Price Index averaged 205.9 points in July, which is 4 points below June and 7 points lower than in July 2012. The Index measures monthly changes in international prices of a basket of meat, dairy, cereals, oils and fats, and sugar.

The FAO Cereal Price Index averaged 227.7 points in July, down 8.8 points from June and as much as 33 points below July last year. “The sharp decline mostly reflected falling maize prices as favourable weather boosted hopes of a significant production increase in several leading maize-producing countries,” said the agency.

Wheat prices also fell but the strong pace of exports limited the decline. Rice price changes varied according to origins, with a decrease in Thai prices contrasting with higher Vietnamese quotations.

The FAO Oils/Fats Price Index averaged 191 points in July, down by 7 points from June and the lowest level in three years. Meanwhile, while dairy prices fell overall – 2.6 per cent from June – the decline was by a smaller margin than in the previous two months as a result of tightening availabilities in Oceania and stagnating milk production amongst other exporters, principally in Europe, South America and the United States.

Meat prices, FAO noted, were more or less unchanged from the revised June level. Prices for poultry and pig meat were lower, while those of bovine and ovine meat rose.

In addition, sugar prices declined for the fourth consecutive month in July, on the back of 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, FAO stated.

The biannual Food Outlook published by the UN Food and Agriculture Organization (FAO) states that countries are estimated to spend $1.09 trillion to import food this year, hovering near last year’s level but 13 per cent below the record in 2011.

The greatest changes to the import bill costs of importing animal-protein products, which includes meat, dairy and fish, may increase as much as eight per cent to around $543 billion, dependent on larger volumes of imports as well as prices, particularly for dairy products and fish.

These increases to the bill could likely be offset by anticipated lower international prices for sugar and vegetable oils, as well as on beverages such as coffee, tea and cocoa.

The UN food agency said its Global Food Consumption Price Index has registered little movement since the end of last year, in contrast to the volatility of earlier months.

Meanwhile, record harvest prices are due to force global grain prices lower, the agency predicted, balancing out trade.

Cereal harvests forecast is expected to surge to a record 2,460 million tonnes in 2013, pointing to “a more comfortable” cereal supply-and-demand balance in the new season, according to the report.

This year’s forecasted cereal production could be 6.5 per cent up from last year’s reduced level, FAO reported, supported by higher global wheat output, rice production, and a sharp expected rebound in maize harvests and use, particularly for feed and industrial purposes, in the United States.

“Based on current supply and demand prospects, by 2014, world cereal inventories could register an 11 per cent recover to 569 million tonnes, the highest level in 12 years,” the report cited.

The resulting world trade in cereals is expected to reach 306 million tonnes, similar to this season’s level.

Also, global fish production is likely to reach a new record level in 2013 topping 160 million tonnes for the first time, as world fish prices continue to rise.

“Buoyant demand in developing countries for has driven world aquaculture production to new heights,” authors of the report said, adding that consumption is down in the traditional markets.

Fish for direct human consumption will also increase significantly during 2013 as a smaller share of captures is destined for fish meal production. On a per capita basis, global fish consumption is approaching 20 kg a year. Prices on a number of farmed species, such as salmon, shrimp and selected bivalves, have risen sharply, according to the report.

Demand for meat production is expected to grow more in developing countries, with the global outlook remaining modest. Meat prices have been historically high since early 2011.

World meat production is forecast at 308.2 million tonnes in 2013, a modest increase of 4.3 million tonnes, or 1.4 percent on 2012. While producers in many countries continue to face high feed prices, these started falling in 2012, and could further diminish in 2013.

World trade in dairy is expected to expand, but not by much due to limited supply. International prices of dairy products registered strong growth during the first four months of 2013, particularly in March and April, and high prices are expected for the next few months. The main cause of the price surge was a steep fall-off in New Zealand’s milk production.

Sugar production is expected to rise in 2012-2013 by 2.8 percent to 190 million tonnes, surpassing consumption for a second consecutive season. The surplus is likely to hover around 6.5 million tonnes. Increased production in Brazil, United States, Australia and China is anticipated to offset declines in India, the EU and Thailand.

This year’s Food Outlook has a special report on quinoa, coinciding with 2013 having been declared the International Year of Quinoa by the UN General Assembly.

“World demand is expected to keep growing vigorously in the coming years, driven primarily by developed countries, where expenditure on healthier and natural foods is on an upward trend,” the report said.

In a news release, the UN Food and Agriculture Organization (FAO) said its most recent Food Price Index dropped 1.1 per cent from November. The decline from 213 to 209 points was largely due to the continuing decrease in the international prices of cereals, oils and fats.

The Index measures the monthly change in international prices of a basket of 55 food commodities, including meat, dairy, sugar, and cereals. The prices for cereals also increased slightly, while sugar and oils prices fell.

“The result marks a reversal from the situation last July, when sharply rising prices prompted fears of a new food crisis,” said the Assistant Director-General in charge of FAO’s Economic and Social Development Department, Jomo Sundaram.

“But international coordination, including through the Agricultural Market Information System (AMIS), as well as flagging demand in a stagnant international economy, helped ensure the price spike was short-lived and calmed markets so that 2012 prices ended up below the previous year’s levels,” he added.

According to its website, the AMIS initiative – for which the Secretariat is based at FAO Headquarters in Rome, Italy – seeks to enhance food market transparency and encourage coordination of policy action in response to market uncertainty, mainly focusing on four foods that are particularly important in international markets: wheat, maize, rice and soybeans.

As a whole, the Index averaged 212 points in 2012, seven per cent less than in 2011. The sharpest falls in prices were registered in sugars, dairy products and oils, and to a lesser extent in cereals and meat.

From July to September, cereal prices had steadily increased due to uncertainties and tight supplies. However, they began dropping in October because of weaker demand for supplies in industrial uses.

In December, maize prices fell sharply as large export supplies in South America relieved market pressure. Rice prices also dipped last month due to the expectations of good harvests, but wheat values remained virtually unchanged.

Oils and fats prices experienced a 1.9 per cent drop mainly due to the continued build up of large global inventories of palm oil, and sugar prices decreased only marginally. FAO noted that an increase in global sugar production, especially in Brazil, kept international prices down for much of the second half of 2012.

Meat prices registered a slight decrease as pig prices fell by 2 per cent, the agency stated, while dairy prices rose by 0.9 per cent – they were the only commodities to have experienced a rise in price as the dairy market is increasingly susceptible to supply changes related to pasture conditions, feed availability and affordability.

The Food and Agriculture Organization’s (FAO) monthly Food Price Index rose six per cent in July, mostly driven by a surge in grain and sugar prices, and averaged 213 points, up 12 points from June.

The index measures the monthly change in international prices of a basket of 55 food commodities, including meat, dairy, sugar, and cereals.

According to FAO, the severe deterioration of maize crop prospects in the United States, following extensive drought damage, pushed up maize prices by almost 23 per cent in July.

International wheat quotations also increased, experiencing a 19 per cent surge due to low expectations of production in Russia, coupled with the prospects of high demand for wheat because of tight maize supplies. However, international prices for rice remained mostly unchanged.

Untimely rains in Brazil – the world’s largest sugar exporter – largely caused the price of sugar to increase by 12 per cent, and concerns over India’s delayed monsoon and poor rains in Australia also contributed to the rebound in price.

In contrast, the prices for meat and dairy products experienced little change. Average meat prices decreased by 1.7 per cent in July, falling for the third consecutive month, while average dairy prices remained unchanged from June, after five straight months of decline.