World food prices fell in November, having reached record highs over the summer, according to the UN Food and Agriculture Organisation. The FAO's monthly Food Price Index, which measures the price of a range of staple foods across the world, revealed that prices fell 1.5 percent between October and November.  

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After concerns over the effects of drought in the United States sparked grain rallies, causing grain prices to rocket, food prices rose over July and August, into September, though remained fairly constant, if high, overall throughout October.

However, on Thursday (6th December) FAO revealed prices for all commodity groups had fallen, with the exception of dairy. Sugar, oil and cereal prices fell furthest, putting food prices 3 percent below their November 2011 levels.

Sugar fell by 4.8 percent as abundant quantities are available, mostly from the world's number one exporter, Brazil. Oils fell by 2.9 percent from October. FAO said "The main driving factor remains abundant palm oil production, which, combined with weak world import demand, has led to further build-ups in inventories." However, unsustainable palm production is still causing concern around the world.

In November, Adam Harrison of conservation organisation WWF told Farming Online, "The impacts of irresponsible and unsustainable palm oil expansion to meet growing demand are completely unacceptable in terms of deforestation, damage to wildlife and climate change. The urgency of the problem needs an equally urgent response."

Better than expected soy yields in the United States and large global availabilities of rape and sunflower-seed oils also contributed to the decline, FAO said. Dairy prices continued their rise from a mid-year low, increasing 0.5 percent, though FAO said that prices appear to be stabilising.

Although cereal prices fell 1.5 percent due to the wide availability of rice, and reduced fears over wheat scarcity, the analysis coincided with a reduction in the FAO's forecast for global cereal production in 2012. FAO estimated cereal production will contract 2.8 percent 2011's record production levels of 2.282 billion tonnes.

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