World Food Prices Seen Falling More in September
By REUTERS
Published: October 5, 2011 at 7:30 PM ET
MILAN (Reuters) - World food prices fell last month, United Nations data is likely to show on Thursday, easing inflationary pressures ahead of the European Central Bank's expected decision on interest rates.
U.N. Food and Agriculture Organisation (FAO) figures are expected to reflect a sell-off in grains, part of a retreat across commodities on economic gloom, and edging back further from the record high in February which helped stoke the unrest of the Arab Spring.
The FAO will update its monthly Food Price Index on Thursday, just as the ECB meets and is widely expected to leave interest rates unchanged as investor concerns grow about Greece's possible default and its impact on the global economy.
U.S. Federal Reserve Chairman Ben Bernanke said on Tuesday the impact of food prices and energy on inflation was receding as he gave his bleakest assessment of the fragile U.S. recovery.
The index -- which measures price changes for a basket of cereals, oilseeds, dairy products, meat and sugar -- hit a record high of nearly 238 points in February, raising fears the 2008 food crisis which sparked riots in some poor countries could be repeated.
Global food prices have fallen back in the last few months but remained at historically high levels.
A sell-off on international grain markets in September, with investors worried about a global economic slowdown which may undercut demand, is likely to add pressure on last month's food prices.
Benchmark U.S. grain futures fell sharply in September also hit by larger-than-expected supplies announced by the U.S. government, with corn futures plunging 23 percent for the month -- the biggest monthly drop in more than 15 years.
U.S. wheat tumbled 23 percent in September and soybeans dropped 19 percent, the biggest monthly fall in three years. Sugar prices also fell last month.
On the physical markets, the average monthly price of benchmark U.S. maize fell to $305.63 (197.61 pounds) a tonne in September from $308.38 in August, while U.S. Hard Red Winter wheat rose to $334.60 a tonne from $331.00 a tonne, the FAO's database showed.
Thai rice jumped to a $617.75 tonne in September from $582.25 a tonne in August, according to the database.
(Reporting by Svetlana Kovalyova, editing by William Hardy)
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