More favourable growing conditions and improved supply prospects for maize have eased fears of sharp global price hikes, FAO’s Regional Office for Asia and the Pacific announced today.

In early May, a decline in maize and wheat accounted for global price increases of more than 15 percent since the beginning of 2014. However, the FAO’s Food Price Index and Cereal Supply and Demand Brief, both released today, indicate higher than expected global production of cereals.

“Since the last data released in early May, we are seeing higher than anticipated prospects for maize in particular,” said Hiroyuki Konuma, FAO Assistant Director-General and Regional Representative for Asia and the Pacific, adding that global production of coarse grains now stands at 1 274 million tonnes or 18.6 million tonnes higher than the previous month. This has pushed the price for maize down from the previous month.

“An improved outlook for maize crops in the United States and larger than anticipated harvests in Argentina and Brazil are largely responsible,” Konuma said during FAO’s monthly regional press briefing.

Konuma noted that wheat prices, which had contributed to price increases in previous months, partly amid fears of disruptions to trade flows from Ukraine. World wheat production in 2014 is forecast at nearly 703 million tonnes, up marginally from the May forecast, though down from the previous year.

Rice production in 2014 is expected to reach about 503 million tonnes (milled basis), 1.9 million more than foreseen last month, and 1.2 percent more than in 2013, the FAO’s Cereal Price Index reports. A renewed world record harvest of rice is expected this year.

The FAO Cereal Price Index averaged 204.4 points in May, down 2.4 points (or 1.2 percent) from April and 30 points (or 13 percent) below last year. The forecast for world cereal stocks by the close of crop seasons ending in 2015 has been raised by almost 10 million tonnes since May, to 576 million tonnes. Based on the latest forecast, the global cereal stocks-to-use ratio could reach a 10-year high of 23.1 percent, up marginally from 2013/14.

The price of meat has remained firm but relatively unchanged.

While the price of sugar increased in May, vegetable oils averaged 195.3 points that month, down 3.7 points (or 1.8 percent) from April, reflecting lower quotations of palm, soy and rapeseed oils.

Globally, the FAO Dairy Price Index averaged 238.9 points in May, representing a second sharp monthly fall, and a decline of 12 points (or 5 percent) over April. However, demand for dairy products in Asia and the Pacific remains robust and is expected to continue to increase, Konuma noted.

Overall, the FAO Food price Index showed a second consecutive month of price declines, retreating from the 10-month high reported in March of this year.

The Food Price Index, based on the prices of a basket of internationally-traded food commodities, averaged 207.9 points in May 2014, down 2.5 points (or 1.2 percent) from April, and nearly 7 points, or 3.2 percent, below the May 2