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World food prices climb on sugar costs â€Ž

14 July 2011 11:12 (UTC +04:00)

An index of 55 food commodities rose to 233.8 points from 231.4 points in May, the United Nationsâ€™ Food and Agriculture Organisation said in a report on its website today. The gauge climbed to an all-time high of 237.7 in February.

Food will remain costly in the next few years and price swings will be around â€œfor a long time,â€ Jose Graziano da Silva, the FAOâ€™s director-general elect, said.â€œWeâ€™re not yet seeing any break,â€ Abdolreza Abbassian, a senior economist at the FAO, said via phone from Rome. â€œAlmost in every country, including in Europe, the issue of higher food prices has already become tangible.â€

The price of staple foods including corn will more than double in two decades without action, Oxfam International said in May. World food output will have to rise 70 per cent by 2050 as the global population climbs to 9.2 billion from an estimated 6.9 billion in 2010, the FAO estimates.

Growth in agricultural output will slow to 1.7 per cent a year through 2020, compared with 2.6 per cent in the previous decade, FAO and the Paris-based Organization for Economic Cooperation and Development said in a report.

â€œThe question of how to satisfy the food needs of an expanding population with ever more sophisticated tastes and an increasingly unified mode of consumption is getting even more pressing,â€ analysts Veronique Riches-Flores and Loic de Galzain at Societe Generale SA wrote in a report.

The FAO sugar index jumped 15 per cent to 357.7 points, as production in Brazil, the worldâ€™s largest producer of the sweetener, is forecast to fall below last yearâ€™s level, the FAO said. That lifted the entire food index, Abbassian said. Raw sugar futures jumped 14 per cent in New York in May. â€œThe surprise was sugar,â€ Abbassian said. â€œIf it wasnâ€™t for sugar we would certainly see a decline.â€

Global production of wheat, coarse grains and rice in the 2011-12 season will be more than forecast last month, the FAO said in a separate statement on its website. World wheat output will climb to 675.6 million metric tons from 653.9 million tons in 2010-11, 4.7 million tons more than its June 22 outlook, the FAO said.

Production of coarse grains, which includes corn and barley, will rise to 1.16 billion tons from 1.12 billion tonnes, an increase of 5.9 tonnes from the June outlook, according to the FAO.

Rice production in 2011-12 is forecast to climb to 476.1 million tonnes from 463.7 million tonnes a year earlier, the FAO said. The outlook was raised by 600,000 tonnes from June 22.