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The Index, based on the prices of a basket of internationally traded food commodities, averaged 203.4 points in January 2014, down 1.3 percent from December and 4.4 percent below January last year.
"We're seeing lower prices due to abundant supplies, but stronger upturn in demand, such as an increase in the pace of imports from Asia, could limit the decline," said FAO economist Abdolreza Abbassian.
Sugar and vegetable oils took downward turns of 5.6 percent and 3.8 percent respectively. Meanwhile, bumper cereal crops helped to bring down cereal prices, which were down 1.6 percent from December and as much as 23 percent lower than in January 2013. Even meat prices, which had strengthened over the past few months, fell slightly in January.
"The only notable exception was a rise in dairy prices. The FAO dairy price index registered a 1.3 percent increase in January to 267.7 points, largely reflecting strong demand, especially from China, North Africa, the Middle East and the Russian Federation, said Michael Griffin, FAO's dairy and livestock market expert.