Rome - AFP
The sharp drop in the cost of oil is not only helping people fill their petrol tanks but their stomachs as well by reducing food prices, according to data released Thursday.
The UN's Food and Agricultural Organization said its food price index declined 1.9 percent in January to 182.7 points, due to "robust inventories, continued strength in the US dollar and weak crude oil prices."
Food prices have now fallen back to the levels of five years ago, but on a real basis are still about 20 percent higher than in the 2000s.
Global crude oil prices have fallen by about half since June, and lower fuel costs should reduce farmers' production costs, as well as expenses to ship food.
The FAO said the lower prices in January also reflected "strong production expectations" as it raised its 2014 forecast for world cereal production to a record high 2,534 million tonnes, and added that early indications for crops in 2015 are favourable.
It noted that the stock-to-use ratio for cereals is expected to rise to 25 percent, the highest level in over a decade, and considerably above the historic low of 18.4 percent hit in 2007-2008 during a time of volatile global food commodity prices.
While stocks of wheat and maize are expected to grow, those of rice are poised to drop, said the FAO.
The FAO's Food Price Index is a trade-weighted index that tracks prices of five major food commodity groups on international markets.