FAO index drops again in June 2012. - In June, world food prices fell for the third month in a row, dropping 1.8% compared to May and falling to their lowest level since September 2010, according to statistics of the United Nations Food and Agriculture Organisation (FAO). The FAO index for the prices of food products is down around 15% below its peak level of February 2011, when it saw its highest level since the FAO began measuring food prices in 1990. All food groups saw their prices fall, with the sharpest drop in oils and fats. All types of meat are down, but in spite of everything, the FAO notes that over the last six months, the average of meat prices was still 1% higher in 2012 than in 2011, sustained by lingering high beef quotations. Dairy products saw their fifth consecutive month's drop since the beginning of the year; milk prices have lost 16.1% of their value. Sugar also continued its downward trajectory, due to an increase in supply in India, the European Union and Thailand. The persistent climate of economic uncertainty and generally good supply prospects prevented the index from increasing, despite growing concerns due to dry weather which pushed certain crop prices up towards the end of the month, specialists explain. However, food prices have started to increase again recently, due to the effects of unfavourable weather conditions, which is likely to lead to an increase in July. In another report, the FAO has revised its forecasts for global cereals production in 2012 downwards by more than 23 million tonnes since May. According to the new estimates, global cereals production in 2012 has hit record levels of 2396 million tonnes, or 2% above last year's high. (IL/transl.fl)