World food prices fall in July to lowest in six years

06-Aug (FiscalTimes) — The Rome-based Food and Agriculture Organization’s (FAO) food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy, meat and sugar, averaged 164.6 points in July, down 1.7 points or 1.0 percent from June.

July’s reading is the lowest on the index since September 2009 and follows more than a year of almost uninterrupted falls, driven by hefty overall supplies and soft demand, said FAO senior economist Abdolreza Abbassian.

The FAO food price index has been reflective of the fate of wider commodity prices, pummelled by fears of a hard economic landing in China, abundant supply and the prospect of U.S. interest rate rises that have bolstered the dollar.

Many global commodities are priced in dollars, so a stronger U.S. currency makes imports more expensive in other currencies.

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PG View: The CRB index is trading below the psychological 200 level for the first time since May 2003. More than a 12-year low! This does not bode well for global growth and therefore does not bode well for a Fed rate hike this year.