Global food prices drop due to cereal harvests: FAO

Global food prices dipped in August, mainly due to bumper cereal harvest prospects pushing up expectations for larger grain inventories, the United Nations' Food and Agriculture Organization (FAO) said Thursday.

The FAO Food Price Index declined 1.3 percent from July, largely driven by a 5.4-percent decline in the FAO Cereal Price Index, reflecting a sharp fall in wheat prices as the outlook for production in the Black Sea region improved, the Rome-based UN food agency said.

The FAO raised its forecast for global cereal production to 2.61 billion tons, an all-time record. Worldwide stocks of cereals are also expected to reach a record high by the close of the 2018 season, the FAO said.

The new estimates reflect larger anticipated wheat harvests, as improved production prospects in the Russian Federation more than offset downward revisions made for Canada and the United States, as well as higher maize and barley outputs in Brazil and the Russian Federation. Global rice production in 2017 is also now forecast to reach a record high, according to FAO.