U.N.: Global food prices at 11-month low

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ROME, Nov. 3 (UPI) -- Food prices globally dropped to an 11-month low in October, the U.N. Food and Agriculture Organization, based in Rome, said Thursday.

Despite the decrease, food prices still were higher than last year and remained volatile, the U.N. unit said in a release.

FAO's Food Price Index averaged 216 points last month, down 4 percent from September, the agency said. The index is a measure of basic food prices at the global level.

"The drop was triggered by sharp declines in international prices of cereals, oils, sugar and dairy products," the organization said. "Meat prices declined the least."

The decline was attributed to an improved supply outlook for several commodities and uncertainty about global economic prospects.

Most agricultural commodity prices could remain below their recent highs looking ahead, the Food and Agriculture Organization's biannual Food Outlook report indicated. The report that analyzes developments in global food and feed markets also was published Thursday.

A record harvest is expected this year for cereal grains, said Food Outlook, forecasting a record 2.3 billion tons, 3.7 percent higher than last year. Cereal prices also were expected to stay relatively firm in 2012.

The Outlook said prices generally remained "extremely volatile" and were affected by unstable financial and equity markets.

"Fluctuations in exchange rates and uncertainties in energy markets are also contributing to sharp price swings in agricultural markets," FAO grains analyst Abdolreza Abbassian said.