Record Food Prices Will Probably Be Sustained This Year, FAO's Konuma Says
Record food prices are likely to be sustained this year because of high oil costs and lower harvests, said the United Nations Food & Agriculture Organization.
Global food costs rose to an all-time high in February, according to the UN. The increase has contributed to riots across North Africa and the Middle East that toppled leaders in Egypt and Tunisia. Prices surged as bad weather ruined crops from Canada to Australia and Russia banned grain exports after its worst drought in a half-century.
“We will get an increase in production but not sufficient to ease the market,” said Abdolreza Abbassian, a senior FAO economist. “High volatile prices will continue in 2011 and even in 2012,” he said in a video briefing today.
An index of 55 food commodities rose 2.2 percent to 236 points from 230.7 in January, the UN said March 3. Wheat rose 60 percent on the Chicago Board of Trade in the past 12 months, corn gained 92 percent and rice added 5 percent.
Turmoil in oil-producing countries including Libya has pushed crude above $100 a barrel. Higher crude prices make biofuels produced from crops more competitive while raising the cost of tractor fuel and fertilizer for farmers.
Global food prices probably will rise in the first half of this century because of an expanding population and higher incomes, slower crop-yield growth and the effect of climate change, Ross Garnaut, the Australian government’s climate-change adviser, said last week at a conference in Canberra.
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