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LATEST NEWS UPDATES | FAO food price index hits new high

FAO food price index hits new high

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published Published on Jan 10, 2011   modified Modified on Jan 10, 2011

Global food prices rose in December, with the FAO Food Price Index at a record high, the UN Food and Agriculture Organisation said on Wednesday, past 2008 highs when rising food prices sparked riots in a number of countries.

Up for the sixth month in a row and fueled by surging sugar prices and rises in cereals and oils, the index was the highest since records began in 1990, in nominal terms, and topped the high of 213.5 in June 2008, during the food crisis of 2007-08. The index, which measures monthly price changes for a food basket composed of cereals, oilseeds, dairy, meat and sugar, averaged 214.7 points last month, up from 206.0 points in November.

The FAO's Sugar Price Index soared to a record high of 398.4 points from 373.4 points in November. Its Cereals Price Index, which includes prices of main food staples such as wheat, rice and corn, rose to an average of 237.6 points in December, the highest level since August 2008 and up from 223.3 points in November.

The Oils Price Index also jumped to 263.0 points in December from 243.3 points in November. Meanwhile, in a interview to Reuters, Food and Agriculture Organisation's economist Abdolreza Abbassian said that prices of corn, wheat and other grains can go much higher and current weather patterns are of concern.

“We are concerned, the real reason for concern is the unpredictability,”Abbassian said. There is still room for prices to go up much higher, if for example the dry conditions in Argentina tend to become a drought, and if we start having problems with winter kill in the northern hemisphere for the wheat crops, he said.

Prices could go much higher: Economist

Prices of corn, wheat and other grains can go much higher and current weather patterns are of concern, the United Nations' food agency economist said after its food price index hit a record high in December. “We are concerned, the real reason for concern is the unpredictability,” the FAO's economist Abdolreza Abbassian said. “There is still room for prices to go up much higher, if for example the dry conditions in Argentina tend to become a drought, and if we start having problems with winterkill in the northern hemisphere for the wheat crops,” he said.


The Financial Express, 6 January, 2011, http://www.financialexpress.com/news/fao-food-price-index-hits-new-high/733899/0


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