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U.N. Food price index hits record high

04 February 2011 11:40 (UTC +04:00)

Baku - APA-Economics. The United Nations has said its monthly food price index moved to a record high in January due to higher global prices of cereal, sugar and vegetable oils.

The index, published Thursday by the U.N.’s Food and Agriculture Organization, rose for the seventh consecutive month to 231 points and is up 3.4% on the month.

The figure is the highest level registered since 1990 when the agency started monitoring prices.

The FAO index is a measure of the monthly change in international prices of a basket of commodities. It is closely tracked by analysts and investors as a global benchmark for food price trends.

High food prices are of major concern, especially for low-income food deficit countries that may face problems in financing food imports and for poor households which spend a large share of their income on food, said Abdolreza Abbassian, Secretary of FAO’s Intergovernmental Group on Foodgrains.

For the last eight months, adverse weather, either too dry or too wet, has affected major food producers and exporters around the world, from Russia and Ukraine to Canada and the U.S., Germany, Australia, Pakistan, Argentina and the countries of Southeast Asia.

The cereals price index also rose 3% and is at a 30-month high of 245 points, though that is some 11% lower than the historic high of April 2008. The Sugar Price Index is up 5.4% on month at a record 420, and the Oils and Fats Price Index rose 5.6% to a near-record 278.

Meanwhile, the Dairy Price Index averaged 221 points in January, up 6.2% from December, but still 17% below its peak of November 2007.

The Meat Price index was steady at 166 points, as falling prices in Europe amid a feed contamination was offset by price increases in Brazil and the U.S.

FAO made changes in the Meat Price Index to better reflect the structure of world trade in meat products.

However, the revised meat index didn’t significantly alter the pattern of the overall Food Price Index.