Source:  John Strak, MEATINGPLACE.COM, 4/11/11

FAO has announced that its Food Price Index has dropped for the first time after eight months of continuous price rises. The Index averaged 230 points in March 2011, down 2.9 percent from its peak in February, but still 37 percent above March of last year.

The FAO Meat Price Index averaged 169 points in March, little changed from February.

The Cereal Price Index averaged 252 points in March, down 2.6 percent from February, but still 60 percent higher than in March 2010. March was extremely volatile for grains, with international quotations first plunging sharply, driven largely by outside market developments such as the increased economic uncertainties accompanying the turmoil in North Africa and parts of the Near East as well as the Japanese earthquake and tsunami, before regaining most of their losses.

"The decrease in the overall index this month brings some welcome respite from the steady increases seen over the last eight months," said David Hallam, Director of FAO's Trade and Market Division. "But it would be premature to conclude that this is a reversal of the upward trend," he added.

"We need to see the information on new plantings over the next few weeks to get an idea of future production levels. But low stock levels, the implications for oil prices of events in the Middle East and North Africa and the effects of the destruction in Japan all make for continuing uncertainty and price volatility over the coming months," said Hallam.

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