February 3, 2011

Food Prices Hit Record High In January

The U.N.'s Food and Agriculture Organization (FAO) said Thursday that world food prices hit a new record high in January after rising for a seventh consecutive month.

The FAO Food Price Index averaged 231 points in January, which is up 3.4 percent from December and its highest level since FAO started measuring food prices in 1990.

"The new figures clearly show that the upward pressure on world food prices is not abating. These high prices are likely to persist in the months to come," FAO economist and grains expert Abdolreza Abbassian was quoted as saying.

The rises were particularly high for dairy products, and oils and fats rose 5.6 percent from the previous months, while cereals jumped 3.0 percent because of lower global supply of wheat and maize.

Meat prices remained broadly stable due to a fall in prices in Europe caused by last month's scare over dioxin poisoning in eggs and pork in Germany, which compensated by a slight increase in export prices from Brazil and the U.S.

"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," Abbassian said.

"The only encouraging factor so far stems from a number of countries where -- due to good harvests -- domestic prices of some of the food staples remain low compared to world prices," he added.

FAO data released on Thursday showed the Food Price Index hit 200 points in 2008 during the height of the 2007/2008 food crisis.  It breached that level for the first time in October 2010 with 205 points and has risen further since then.


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