The global food price index has been falling for a full year now, with the latest slide recorded in March caused by a sharp drop in sugar prices, according to the Food and Agriculture Organization.
The FAO said that its Food Price Index eased by 1.5 percent from February to March, and by 19 percent over the past year.
“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 and contributed to the lower index, which in March averaged 173.8 points,” the FAO said in its latest report.
The FAO Food Price Index is a trade-weighted index that tracks prices of cereals, meat, dairy products, vegetable oils and sugar.
The sub-index on sugar averaged 187.9 points in March, down a sharp 9.2 percent or 20 points from February.
“This was mainly due to improved crop prospects but also the continued weakening of the Brazilian currency against the US dollar, which is supportive of exports,” the FAO explained.
Last month, the Sugar Regulatory Administration scrapped export allocations of raw sugar for countries other than the United States.
This was amid projections that domestic production of raw sugar may fall short of the 2.5 million-ton goal for the crop year that ends July.
According to SRA Administrator Regina Martin, raw sugar output for 2014-2015 is expected to be about 35,000 tons less than the target.
Even then, output is still anticipated to be higher than the previous crop year’s 2.45 million tons.
Martin said scrapping allocation for non-US sugar exports resulted from the unfavorable weather conditions that affected sugarcane plantations in the Visayas.
Considering this, the SRA issued Sugar Order No. 1-A last March 12 to increase raw sugar allocation for domestic use to 95 percent of local output. Previously, the allocation was 90 percent.
Martin said that while the 5-percent allocation for the non-US market was removed, the SRA retained the 5-percent earmarked for US exports in compliance with commitments to the World Trade Organization.