Food prices have fallen for the second time in just as many months, with the Food and Agriculture Organization of the United Nations expecting a similar result this June.
The global cost of a basket of food commodities is measured by the FAO Food Price Index and averaged 204 points in May, down nine points from April. Prices for a food basket of cereals, oilseeds, dairy, sugar and meat are at their lowest since hitting 236 points in September 2011. But crop prices are still high and the outcome for the months ahead depend on weather conditions in upcoming months. Food prices have dropped roughly 14 percent after reaching record highs in February 2011. The high costs contributed to the Arab Spring in the Middle East and Northern Africa which began in late December 2010.
The dip in food costs for May are due to a strengthening U.S. dollar, enhanced expectations for crops in high yielding countries and the continued development of Europe’s debt crisis. Dairy products noticed the most noticeable drop of nearly 12 percent, followed by a 9 percent decline in sugar and a 7 percent fall in oils and fats reported Reuters.