Global food prices hit record high

 

Global food prices hit a fresh
record high last month, surpassing the levels seen during the 2007-08 food
crisis according to the United Nations.

The Rome-based Food and Agriculture
Organisation said its food price index, a benchmark basket tracking the
wholesale cost of 55 commodities such as wheat, corn, rice, vegetable oils,
dairy products, sugar and meats, jumped to 231 points, up 3.4 per cent from
December.

 The FAO started tracking the basket in 1990.

The fresh price jump came on the
back of strong demand and adverse weather conditions, which continued to affect
production prospects from Argentina to Australia.

“Prices of all the commodity groups
monitored registered strong gains in January compared to December, except for
meat, which remained unchanged,” the FAO said.

Commodities analysts and UN
officials fear further price increases as February has started with strong
gains in wheat and sugar markets due to bad weather.

The worst effects of the current
spike in agriculture inflation also has the potential for civil unrest, these
observers say.

“The new figures clearly show that
the upward pressure on world food prices is not abating,” FAO economist
Abdolreza Abbassian said in a statement.

“These high prices are likely to
persist in the months to come.”

The surge in wholesale food prices
is slowly filtering into retail prices in poor and rich nations alike, stoking
inflationary pressures and triggering sporadic food riots in countries such as
Algeria and Mozambique.

But UN food officials fear more
unrest as governments and companies pass to consumers the increase of up to 110
per cent in global food prices.

Cyclone Yasi, carrying winds of up
to 300kph, hit sugar cane crops in Australia, the world’s third-largest
exporter of the sweetener.

In New York, raw sugar prices
surged above 35 cents per pound for the first time since 1980. Sugar hit an
intraday high of 36.08 cents, up 6.2 per cent.

Wheat, corn and soybeans all hit
their highest levels in 30 months, as traders worried that dry conditions in
Argentina, the world’s second-largest corn exporter, and a cold snap in the US,
the world’s biggest wheat exporter, could hit the crops’ development,
tightening markets later this year.

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Soaring cost of staple foods such as meat, sugar, rice and wheat could cause instability in many countries.
Photo: File