Food prices continue to drop: ABN Amro

Economists at ABN Amro predict that grain prices are not likely to rise in the immediate future, prices for corn will stagnate, wheat will get cheaper, all leading to lower food prices, according a newly published report from the bank. The production of wheat still remains well above the long-term average, which creates a downward pressure on prices, analysts write. At the same time, there is a slight increase in demand in Europe and Canada that does not, however, offset the increase in supply. Thus, lower market prices for wheat are expected, which can benefit consumers though a reduction in price of products like bread and cereals. The economists also note a decrease in price for coffee and sugar in recent weeks related to the depreciation of the Brazilian real. The prices for these commodities are, however, expected to increase to the excess of demand over supply, and because of unfavourable weather conditions affecting supply. Simultaneously, the economists do not expect major alterations in the price of corn. The overall levels of both production and consumption are not undergoing significant changes, the published report suggests.