Fao: Globbal Food Prices Fell To 55-Month Low Level In Feb.

- Global food prices fell to 55-month low level, led by sugar, according to the FAO Food Price Index, released on Thursday.

The UN Food And Agriculture Organisation's (FAO) Food Price Index, declined to a 55-month low in February, dropping 1.0 percent from January and 14 percent below its level a year earlier.

"Lower prices for cereals, meat and especially sugar more than offset an increase in milk and palm oil prices" the FAO said in a statement on the Index. The FAO Food Price Index averaged 179.4 points in February, down from 181.2 points in January and 208.6 points in February 2014.

"Its ongoing decline - to its lowest level since July 2010 - reflects robust supply conditions as well as ongoing weakness in many currencies versus the U.S. dollar, which appear set to continue" said Michael Griffin, FAO's dairy and livestock market expert.

"The first thing to flag is the favorable outlook for production of a number of crops in 2015. Stocks are also very strong for most cereals" he added.

FAO's Food Price Index is a trade-weighted index that tracks prices of five major food commodity groups on international markets. It aggregates price sub-indices of cereals, meat, dairy products, vegetable oils and sugar.

The FAO Cereal Price Index fell by 3.2 percent to 171.7 points in February, with booming prospects for wheat output explaining the bulk of the decline.

"Rice prices were more stable, with aromatic rice quotations increasing markedly, compensating for much the declines observed in the other rice varieties" the FAO said.

The FAO Sugar Price Index fell by 4.9 percent to 207.1 points in February, the sharpest move of any commodity, reflecing optimism on production prospects in Brazil after recent rainfalls, as well as India's announcement it will subsidize exports to boost sugar sales abroad.

The FAO Meat Price Index averaged 187.4 points in February, down 1.4 percent from its revised January value. Beef and mutton prices declined, largely due to a stronger dollar against the Brazilian real and the Australian dollar.

"Pigmeat prices rose for the first time in eight months, helped up by the European Union's decision to provide aid for private storage in the sector" the FAO said.

The FAO Dairy Price Index rose for the first time in a year, by 4.6 percent on monthly basis to 181.8 points in February.

The increase was driven by milk powders and reflects both a seasonal slowdown in European output as the quota for the season draws to a close and a crimped supply from New Zealand and Australia, while cheese quotations remained largely unchanged.

The FAO Vegetable Oil Price Index was slightly up by 0.4 percent to 156.6 points, reflecting a sizeable rise in palm oil prices - resulting from recent floods in Malaysia and from a hike in Indonesian domestic biofuel subsidies expected to stoke demand - even as soy oil prices continued to decline given prospects of bumper soybean harvests in South America.