International food prices decreased by 14% between August 2014 and May 2015, dropping to a five-year low, according to the latest edition of Food Price Watch.
Cheap oil contributed to abundant global supplies of food in 2014 and prospects of a bumper crop for wheat, maize and rice in 2015—factors that are driving the sharp decline in international food prices.
The agriculture and food sector continue to benefit from less expensive chemical fertilizer, fuel and transportation costs brought on by the previous year’s oil price declines, with food prices holding steady despite recent oil price hikes.
Between August 2014 and May 2015, wheat prices plunged by 18%, rice prices dropped by 14% and maize prices declined by 6%. However, the arrival of El Nino, the appreciation of the U.S. dollar and the recent increase in oil prices could drive up food prices in the coming months.
The demand for maize by the biofuel industry and developments in rice support policies among major producers are other factors that could impact food prices.