Index 55 Food Fell, World Food Cost Slip

55 food items index fell from 214.1 to 210.9 in October 2012 according FAO. The cost of oils and fats remained near the lowest since September 2010. World food costs slipped for a second month in November as prices for oilseeds and cooking oils as well as sugar fell to the lowest in two years, the United Nations’ Food & Agriculture Organization said.

Global food-import bill may fall 9.7 percent this year to $1.14 trillion from a record $1.26 trillion in 2011 on lower costs for freight and reduced spending on vegetables and fruits, grains and sugar, the FAO forecast last month.

The November index for fats and oils dropped to 200.4 points from 206.4 the previous month, to the lowest level since September 2010, the FAO reported. Palm oil futures in Malaysia dropped 5.1 percent last month, while Chicago soybeans declined 7.1 percent.

The FAO’s gauge of world grain prices declined to 255.6 points from 259.5. Wheat prices fell as concerns about an imminent export restriction by Ukraine receded, according to the FAO.

Palm oil futures have dropped 24 percent since the end of August as reserves increased in Indonesia and Malaysia, the biggest producers, weighing on oil-crop prices. Use of the oil is expected to climb to compensate for a shortage of other vegetable oils, according to Hamburg-based researcher Oil World.

“The main driving factor remains abundant palm oil production, which, combined with weak world import demand, has led to further build-ups in inventories,” the FAO wrote in today’s report. “Except for dairy, international prices of all the commodity groups included in the index fell in November.”