Food prices across the world are lowest in six years

Global food prices in July this year were at their lowest level in six years as sharp drops in the value of dairy products and vegetable oils outweighed increases in sugar and, to some extent, cereals, according to the UN's, FAO (Food and Agriculture Organisation).

The Rome based organisation’s food price index, which measures monthly changes for a basket of dairy, cereals, oilseeds, meat and sugar, averaged 164.6 points in July, down 1.7 points or 0.1% from June.

Abdolreze Abbassian, senior economist at FAO said, “July’s reading is the lowest on the index since September 2009 and follows more than a year of almost uninterrupted falls, driven by increased supplied and soft demand.”

Many global commodities are priced in dollars, so a stronger US currency makes imports more expensive in other currencies.

Even though the cereal price rose by 2% from June, it was 10.1% below the July 2014 price.

The sugar price index rose by 2.5% from June 2015, largely due to less than ideal harvesting conditions in the main producing regions in Brazil.