The UN Food and Agriculture Organisation’s (FAO) Food Price Index continued to decline in March, dropping 1.5 percent from February and 18.7 percent from March 2014.

A sharp fall in the price index for sugar - which reached its lowest level since February 2009 - together with dipping prices for vegetable oils, cereals and meat, more than offset a rise in dairy prices. The index measures the price of staple commodity groups (dairy, meat, sugar, oils and cereals) around the world.

This is the enth consecutive decline for the index, which has been tracking downwards since April 2014, though easing prices did slow almost to a halt for several months last year.

Over the last month, abundant supplies and the rising dollar pushed down international prices of most food commodities, and improved crop prospects in Brazil led sugar prices to ease.

Cereal prices fell 1.1 percent from February and as much as 18.7 from March 2014, mainly due to large export supplies and inventories, particularly of wheat and maize. Dairy prices recorded a second consecutive monthly rise.

Record 2014 crops boost cereal supplies

FAO also upped its estimate for global cereal production in 2014, to a record 2,544 million tonnes.

In its latest Cereal Supply and Demand Brief, FAO puts the projected increase down to a larger than anticipated maize harvest in the European Union. If confirmed, global cereal output in 2014 would outstrip the 2013 record by 1 percent.

Early predictions for the 2015 season point to a decline on last year’s production levels.

The forecast for world cereal stocks by the close of crop seasons ending in 2015 has also been revised up sharply since last month's report and now stands at 645 million tonnes. The increase mainly reflects upward revisions to wheat and maize stocks in China.

Based on the current forecasts for cereal stocks and utilization, the cereal stocks-to-use ratio is expected to reach 25.9 percent in 2014/15, its highest value since 2001/02.

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