World food prices rise, stay close to crisis levels: UN

Thu Oct 4, 2012 1:01pm GMT
 

By Catherine Hornby

ROME (Reuters) - World food prices rose in September and are seen remaining close to levels reached during the 2008 food crisis, the United Nations' food agency said on Thursday, while cutting its forecast for global cereal output.

The worst drought in more than 50 years in the United States sent corn and soybean prices to record highs over the summer, and, coupled with drought in Russia and other Black Sea exporting countries, raised fears of a renewed crisis.

Grains prices have retreated in recent weeks due to rapid harvest progress and concerns about weak demand in a slowing global economy.

But the Food and Agriculture Organisation's (FAO) price index, which measures monthly price changes for a food basket of cereals, oilseeds, dairy, meat and sugar, rose 1.4 percent to an average of 216 points in September after remaining stable at 213 points in August.

The rise reflected mainly higher dairy and meat prices, with more contained increases for cereals, it said.

"Prices are remaining high... prices are sustained, it's highly unlikely we will see a normalisation of prices anytime soon," FAO senior economist Abdolreza Abbassian told Reuters in a telephone interview.

He added however that it was not clear whether the small increase in September meant prices were now on an upward trend, but he expected volatility in markets could intensify in coming months.

Parmjit Singh, head of the food and drink sector at law firm Eversheds, said higher prices would place further pressure on squeezed international food supply chains.   Continued...

A view of the supermarket section of Nakumatt's shopping hall in an upper-market area of Nairobi January 5, 2011. REUTERS/Noor Khamis
 
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