Global food prices rose for the eighth straight month in February, the United Nations Food and Agriculture Organization (FAO) reported today, while also warning that unexpected spikes in oil prices could exacerbate an already precarious situation in food markets.
The FAO Food Price Index – a measure of basic food prices at the international level – averaged 236 points in February, up 2.2 per cent from January, the highest record in real and nominal terms, since the Rome-based agency started monitoring prices in 1990.
The prices of all commodity groups monitored increased again last month, except for sugar, FAO noted in a news release.
Also, global cereal prices have increased sharply with export prices of major grains up at least 70 per cent from February 2010, owing to a decline in world cereal production last year and growing demand.
The Cereal Price Index, which includes prices of main food staples such as wheat, rice and maize, rose by 3.7 per cent in February to 254 points – the highest level since July 2008.
FAO is forecasting global wheat production to rise by around 3 per cent this year if there is a recovery in major producers of the Commonwealth of Independent States.
Adding to this situation are concerns over the possible increases in oil prices. “Unexpected oil price spikes could further exacerbate an already precarious situation in food markets,” said David Hallam, Director of FAO’s Trade and Market Division.
“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,” he added.