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World food prices seen at record high in January

Posted by Admin on February 4, 2011

http://in.finance.yahoo.com/news/World-food-prices-seen-record-reuters-194064327.html

A vendor sorts tomatoes at a wholesale vegetable and fruit market in Chandigarh January 29, 2011. REUTERS/Ajay Verma
On Thursday 3 February 2011, 6:12 AM

 

By Svetlana Kovalyova

MILAN (Reuters) – Surging food prices are on Thursday expected to push the United Nations ‘ food price index to a record high in January for a second straight month, further above the levels which prompted food riots in 2007/2008.

The Food Price Index of the UN’s Food and Agriculture Organisation (FAO), which measures monthly price changes for a food basket of cereals, oilseeds, dairy, meat and sugar, hit a record in December, above a previous high set in June 2008 during the food crisis.

A mix of high oil and fuel prices, growing use of biofuels, bad weather and soaring futures markets pushed up prices of food in 2007/08, sparking violent protests in countries including Egypt , Cameroon and Haiti.

The Rome-based agency has warned food prices could climb even higher, expressing concern about global weather patterns.

Severe drought in the Black Sea last year, heavy rains in Australia and dry weather in Argentina and anticipation of a spike in demand after unrest in north Africa and the Middle East has helped power grain prices to multi-year highs.

The worst winter storm for decades in the U.S. grain belt kept up pressure on wheat futures on Wednesday.

Surging food prices have come back into the spotlight after they helped fuelled protests that toppled Tunisia’s president in January and have spilled over to Egypt and Jordan, raising speculation other countries in the region would secure grain stocks to reassure their populations.

Algeria on Jan.26 confirmed it had bought almost a million tonnes of wheat, bringing its bread wheat purchases to at least 1.75 million since the start of January, and ordered an urgent speeding up of grain imports, a move aimed at building stocks.

World leaders at the World Economic Forum in Davos last week warned rising food prices could stoke more unrest and even war. French President Nicolas Sarkozy reiterated calls for regulation to rein in speculation and volatility.

Multi-year highs for grain and sugar futures in January helped push higher spot and physical prices which the FAO uses to calculate the index.

(Reporting by Svetlana Kovalyova; editing by Keiron Henderson)

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