Food commodity prices fall in May to near 6-year low

The world's major food commodity prices fell again in May to the lowest level in nearly six years amid a favourable outlook for this year's harvests, the Food and Agriculture Organisation said Thursday.

The FAO food price index averaged 166.8 points in May, down 1.4 percent from April and as much as 20.7 percent from a year earlier, the Rome-based UN agency said in a statement.

It marked the lowest level since September 2009 in the trade-weighted index that tracks prices on international markets of five major food commodity groups: cereals, meat, dairy products, vegetable oils and sugar.

The May decline was due to a 3.8 percent drop in the cereal price index from a month earlier, a 2.9 percent drop in the dairy price index and a one percent drop in the meat price index.

"FAO has also upgraded its May 2015 forecast for global production of wheat, coarse grains and rice, anticipating bigger maize harvests in China and Mexico as well as more abundant wheat harvests in Africa and North America," the statement said.

According to the latest forecasts, global cereal production in 2015 will be 2.524 billion tonnes, only one percent below last year's record, "reinforcing the view of generally stable cereal markets," the FAO said.