Title: World food prices tumble near 7-year low
Headings: World food prices tumble near 7-year low
World food prices tumble near 7-year low
Mixed harvests

Content: The second largest declines were seen in the FAO’s Dairy Price Index which dropped by 3.0 percent in the same time period “on the back of large supplies, in both the EU and New Zealand, and torpid world import demand,” the FAO noted. The Cereals and Vegetable Oils indices both saw declines of 1.7 percent in January from the previous month and the Meat Price Index fell 1.1 percent. The main factors underlying the lingering decline in basic food commodity prices are “the generally ample agricultural supply conditions, a slowing global economy, and the strengthening of the U.S. dollar,” the FAO noted. Food commodities are not the only ones suffering from demand failing to keep up with a glut in supply with oil prices suffering a similar fate with a steady decline since mid-2014. Signaling no let-up in production, the food agency raised its forecasts for worldwide cereal crops in 2016. “ As a result of the upgraded production and downgraded consumption forecasts, world cereal stocks are set to end the 2016 seasons at 642 million tons, higher than they began,” the agency noted. Mixed harvests
Looking ahead to commodity prices in 2016, the FAO said that there were mixed early prospects for 2016 harvests with potential disruption from erratic weather systems. In particular, the weather pattern known as El Niño was “sending mixed signals about the early prospects for cereal crops in 2016, especially in the Southern Hemisphere.” 2016 crop prospects have been “severely weakened” in Southern Africa, and a 25 percent cut in wheat production in South Africa now appears likely, the FAO said. Conditions for the crop are generally favorable in the Russian Federation and the European Union, but winter plantings declined in the United States and Ukraine.