Global food prices hit new record


    3 March 2011
    Last updated at 11:30 ET

    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% 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% 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.

    More here:
    Global food prices hit new record