(Adds detail, economist comment)
By Isla Binnie
ROME, Sept 8 World food prices rose in August to
their highest since May 2015, as increases in dairy, oils and
sugar offset a drop in cereal prices, the United Nations food
agency said on Thursday.
The rise in the Food and Agriculture Organization's (FAO)
index puts food prices back on an upward path after dropping
slightly in July. The index hit a seven-year low in January.
"We seem to have reached the bottom for food prices in
general some months back, and I think what we are seeing goes
some way to confirm that," said FAO senior economist Abdolreza
Abbassian said a drop back to January's levels was unlikely
but he did not expect a return to historic highs either. In
July, FAO forecast broadly stable prices over the next decade.
Food prices on global markets were almost 7 percent higher
in August than in the same month last year. The index measures a
basket of cereals, oilseeds, dairy products, meat and sugar.
Only cereals dropped in value in August, weighed down by
prospects for a bumper harvest. Abbassian said confusion over an
Egyptian ban on wheat containing a certain fungus was also
having an impact.
"These things are probably going to keep cereals in check,"
Abbassian said, adding, "the United States seems to be heading
for quite an amazing, big crop but this is not the situation
with any of the other crops."
FAO raised its forecast for world cereal production in the
2016-17 season to nearly 2.566 billion tonnes, 1.6 percent
higher than in 2015. It forecast both world wheat and rice
output hitting new records.
The overall food price index averaged 165.6 points in
August, 1.9 percent above the month before.
(Reporting by Isla Binnie; Editing by Toby Chopra)