Global food prices rebound for first time in six months – UN

Photo: IRIN/David Gough
IRIN/David Gough
Photo: IRIN/David Gough

Global food prices rebound for first time in six months – UN

Global food prices rose overall last month for the first time in six months, demonstrating the volatility of international food markets, the United Nations Food and Agriculture Organization (FAO) reported today.

The FAO Food Price Index rose by four points or nearly two per cent to a measure of 214 points in January, with the price of oils increasing the most, followed by cereals, sugar, dairy products and meat.

This is the first such increase since July last year, and the index still stands seven per cent below its position of January 2011.

Abdolreza Abbasian, a senior grains economist with FAO, said there was no single or clear explanation behind the rebound in food prices, with different reasons applying to different commodities.

“But the increase, despite an expected record harvest and an improved stocks situation, and after six months of falling or stable prices, highlights the unpredictability prevailing in global food markets,” he said.

“I can’t see that the usual suspects – the value of the dollar and oil prices – were much involved in January. But one reason is poor weather currently affecting key growing regions like South America and Europe. It has played a role and remains a cause for concern,” he added.

The oils and fats price index rose by three per cent, due mainly to stronger import demand for palm and soy oils, along with a seasonal decline in palm oil production.

The price of all major cereals, with the exception of rice, rose last month, with maize prices jumping by six per cent. The cereal price rise was driven mostly by market concerns about weather conditions affecting crop production this year in several major producing regions.