Economy


Global food prices slightly up in June




Posted on July 09, 2011


GLOBAL FOOD prices rose slightly in June compared to the previous month mainly due to increases in international sugar prices, a United Nations (UN) agency said.

An economist said, though, that the higher prices of sugar were not reflected in the Philippines and that food prices are expected to remain steady for the rest of the year.

In a report dated July 7, the UN Food and Agriculture Organization (FAO) said that the food price index averaged 234 points in June, up by 1% from May.

Compared with the same month last year, it said the food price index rose by 39%.

"A strong rise in international sugar prices was behind much of the increase," the FAO said.

The report showed that the sugar price index averaged 359 points in June, rising by 14% from last month.

The FAO said the price increase was due to the short-term demand for sugar given tight exports of the commodity, particularly in Brazil where production is expected to fall below last year’s output.

Rolando T. Dy, executive director of the University of the Asia and the Pacific’s Center for Agribusiness said on Friday the Philippines was not affected by higher sugar prices given adequate supply of the crop.

"Philippine sugar price is going down with ample supply," he said in a text message.

Sugar Regulatory Administration Administrator Regina Bautista-Martin said in an interview earlier this week that as of July 1, sugar production has reached 2.35 million metric tons (MT), well above the 1.965-million MT estimate for crop year 2010 to 2011, as well as the 2.2-million MT estimated demand.

Two out of 29 mills, she added, are still milling.

The FAO said in the report that prices of international dairy products were nearly unchanged in June as the index averaged 232 points, compared to the previous month’s 231 points.

The meat price index averaged 180 points in June, steady from the previous month.

The price indices of fats and oils and cereals, meanwhile, dropped in June compared to last month’s.

The fats and oils price index averaged 257 points, down from last month’s 259 points.

Cereal prices fell from last month with the price index averaging 259 points, from 261 points in May.

The FAO said improved weather conditions in Europe as well as the announcement of the lifting of the export ban by the Russian Federation have pushed down wheat prices.

The price of rice, it said, were mostly up in June due to strong import demand and uncertainty over export prices in Thailand which is the largest exporter of rice in the world.

Asked for an outlook on local food prices for the rest of the year, Mr. Dy said that he expects prices to remain stable particularly for the rice staple.

"Rice is a major component of food. I don’t see price spikes because of large world stocks. World wheat prices could soften with better harvests," he said. -- Louella D. Desiderio