ROME (Reuters) - Global food prices rose slightly in October after declining for the past five months, the United Nations food agency said on Thursday, forecasting more stability in markets as it raised its estimate for 2013/14 cereals output.
The rise in prices last month was fuelled by sugar costs, which increased due to concerns about harvest delays in Brazil. Prices of wheat and edible oils also strengthened, the Food and Agriculture Organisation (FAO) said.
“Prices are settling around these levels,” FAO senior economist Abdolreza Abbassian told Reuters by telephone. “I do not see such sharp declines in prices in coming months as we have seen in the first half of the year,” he said.
FAO’s index measuring monthly price changes for a basket of cereals, oilseeds, dairy, meat and sugar, averaged 205.8 points in October, up 1.3 percent from September and hitting its highest level since July.
Food prices surged during the summer of 2012 due to a major drought in the United States but prospects for a rebound in cereal production to record levels have weighed on prices this year.
In its biannual Food Outlook report published on Thursday, FAO said food markets were becoming more balanced and less price volatile than in recent years thanks to bigger supplies and a recovery in inventories.
FAO raised its forecast for world cereal output in 2013/14 to 2.498 billion metric tons (2.7536 billion tons), about 10 million metric tons higher than its estimate in October.
It increased its estimate for world wheat output in 2013/14 to 708.5 million metric tons from a previous forecast of 704.6 million metric tons.
World cereal stocks at the close of seasons ending in 2014 are now seen at 564 million metric tons, higher than a previous estimate of 559 million metric tons and up 13 percent from their opening levels.
FAO said it had revised its data for the food price index and had extended records back to 1961.
The revised index still shows a record peak was hit in February 2011, when high food prices helped drive the Arab Spring uprisings in the Middle East and North Africa.
In the summer of 2012 the index began surging to levels close to another peak seen in 2008, when several poor countries experienced riots, some of them deadly.
Editing by Gareth Jones