The Food and Agriculture Organization of the U.N says  worldwide food prices dropped for the third month in a row in December 2012, to its lowest level since June 2011. On the whole, 2012 was a cheaper year to buy food than 2011, according to the FAO food price index.

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

“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.”

FAO adds that 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.

Meanwhile 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.

By UP