World food prices fall for second month in July

World food prices eased for a second month in a row in July, reflecting declines for cereals, vegetable oils and dairy products, but remained up nearly a third over the past year, the United Nations food agency said last week.

The Food and Agriculture Organization's (FAO) food price index, which tracks international prices of the most globally traded food commodities, averaged 123 points last month compared with 124.6 in June.

On a year-on-year basis, prices were up 31% in July.

The Rome-based FAO's index had declined in June for the first time in a year, marking a pause in a broad rally in agricultural commodities fueled by harvest setbacks and Chinese-fueled demand.

FAO's cereal price index fell 3% in July from the previous month, weighed down by a 6% drop in corn prices.

Corn prices were pressured by improved Argentine and U.S. production prospects and canceled import orders by China, which outweighed harvest concerns in Brazil, the FAO said.

International rice prices were also weaker in July, hitting a two-year low as new-crop supplies and currency movements added to a slow pace of sales, the agency said.

Vegetable oil prices declined 1.4% vs. June to a five-month low, as a rebound in palm oil quotations was offset by lower levels for other oils.

The dairy price index dropped 2.8%.

In contrast, FAO's sugar index increased by 1.7%, recording a fourth straight monthly rise with support from firmer crude oil prices and uncertainty over the impact of frost on yields in top exporter Brazil.

The meat index rose slightly overall. Poultry prices increased most sharply due to strong imports in East Asia while pork prices eased amid a decline in Chinese imports, the FAO said.