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FAO report finds dip in February food prices due to coronavirus

07 March 2020

After four months of successive increases, world food prices slipped in February as coronavirus dampened consumer demand.

According to reporting from Reuters, the Food and Agriculture Organisation (FAO) food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 180.5 points last month, down 1.0 percent on January.

FAO also slightly upped its forecast for cereal production, predicting a crop totalling some 2.719 billion tonnes in 2019, up from a previous forecast of 2.715 billion and some 2.3 percent higher than the 2018 crop.

The cereal price index eased 0.9 percent since January, with the international prices of all major cereals, except rice, declining.

FAO said the spread of the coronavirus contributed to the price decline in both indices amid fears the outbreak would trigger a global slowdown.

Coronavirus also hit the meat price index, which dropped 2 percent on the month as imports declined to China, the epicentre of the outbreak, which has so far infected at least 95,300 people globally and caused more than 3,200 deaths.

The dairy price index rose 4.6 percent, pushed higher by a rise for cheese, fuelled by tightening export supplies from New Zealand and Australia.

However, quotations for milk powder fell due to a slowdown in purchases by China, the world's largest importer, because of delays in cargo handling in ports, affected by the spread of the coronavirus, FAO said.

FAO also issued a new forecast for world cereal production, saying global cereal markets were expected to remain well supplied, comfortably covering a forecast growth in consumption.

Its preliminary forecast for 2020 wheat production was pegged at 763 million tonnes, almost unchanged from the near-record level registered in 2019.

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