GLOBAL food prices hit a record high in February, the United Nations (UN) said yesterday, warning that further oil price spikes and stockpiling by importers keen to head off unrest would hit already volatile cereal markets.
Rising food prices are a growing global concern, partly fuelling the protests which toppled the rulers of Tunisia and Egypt in January and February, which in turn unleashed unrest in North Africa and the Middle East from Algeria to Yemen.
The UN Food and Agriculture Organisation’s (FAO) Food Price Index hit its second straight record last month, driven by rising grain costs and tighter supply to further pass peaks seen in 2008 when prices sparked riots in several countries.
FAO economist Abdolreza Abbassian said global food prices are likely to remain close to record highs until the condition of new crops is known, adding that jumps in the oil price could have a bigger impact on grain markets, which have seen benchmark US wheat prices surge 60 per cent in the year to March.
“Until we know about new crops, that means waiting at least until April, our view is don’t expect any major corrections in these high prices, expect even more volatility now that oil has joined the crowd,” Abbassian said.
Oil prices recently hit 2-1/2 year highs, nearing records set in 2008, with markets spooked on concern that North African and Middle East unrest would choke key supplies.
City A.M. Reporter