No end in sight to record food prices

Global
food prices have hit record highs, and could rise even further, according to
the United Nations.

The
UN’s Food Price Index rose 2.2 per cent in February to the highest level since
the UN’s Food and Agriculture Organization (FAO) began monitoring prices in
1990.

It
also warned that spikes in the oil price could make the “already precarious”
situation in the food market even worse.

Apart
from sugar, the FAO said all commodity groups had risen in price.

Oil
prices recently hit two-and-a-half year highs due to political unrest in North
Africa and the Middle East.

The
FAO said the volatility in the oil markets was adding to an already difficult
and uncertain situation.

“This
adds even more uncertainty concerning the price outlook just as plantings for
crops in some of the major growing regions are about to start,” said the
FAO’s David Hallam.

The
International Monetary Fund (IMF) said it was “extremely concerned”
about the situation.

IMF
spokesperson Caroline Atkinson pointed to the “impact on the poorest and
most vulnerable, particularly in the low-income countries, but not only
there”.

The
prices of cereals, such as wheat, rice and maize, have risen by 70 per cent in
the past year.

This
is largely due to droughts in Eastern Europe and floods in Australia – both
major crop producers.

The
FAO said it expected world cereal production to have declined overall last
year.

In
addition, it is also forecasting higher demand for agricultural products for
food, animal feed and fuel production.

These
conflicting pressures could push prices higher.

The FAO, however,
said there were positive early signs that agricultural areas in Russia, Ukraine
and Kazakhstan had begun to recover from last year’s droughts and wildfires.

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