FAO says food prices hit record high

by World Grain Staff
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NEW YORK, NEW YORK, U.S. — The United Nation’s Food and Agriculture Organization’s (FAO) Food Price Index hit a new record high in February, driven mostly by higher prices of cereals, meat and dairy products, the agency said on March 2.

The index rose for the eighth consecutive month, averaging 236 points in February, up 2.2% from January and the highest since January 1990, when the index started.

With the exception of sugar, prices of all other commodity groups monitored registered gains in February. Dairy products and cereals climbed the most. The cereal price index averaged 254 points in February, up 3.7% from January and the highest since July 2008.

The oils/fats index rose marginally to 279 points in February, standing just below the peak recorded in June 2008. By contrast, FAO sugar price index averaged 418 points, slightly below the previous month but still 16% higher than this time last year.

International prices of wheat rose by 7% in February. The benchmark U.S. wheat price averaged $362 per tonne, 75% higher than a year earlier but still 25% below its peak in March 2008. Wheat markets came under downward pressure later in the month following some improvements in weather in China and reports of possible delays in purchases by some of the countries hit by the recent wave of political unrest.

Export prices of maize rose by 9% in February with the benchmark U.S. maize price, averaging $287 per tonne. Prices in February were 77% higher than a year earlier and slightly above the June 2008 peak. The increase reflects a large cut in the official forecast of inventories in the U.S., amid strong domestic use and increased exports.

Export prices of rice were generally stable to lower in February, as export availabilities from recent harvests remained ample. Nonetheless, a strengthening of the Baht against the U.S. dollar lifted prices of rice in Thailand, including the benchmark export price (Thai white rice 100% B), which gained 2% from January. However, at $554 per tonne, it was 4% below its level of February 2010 and 42% below the peak of May 2008.

In Africa, prices of coarse grains have started to increase in some countries, particularly in Southern Africa, but in general remain lower than last year.

In Asia, prices of rice and wheat are at high levels despite declines in some markets. In the CIS, wheat prices stabilized or decreased in February in some countries but overall, are at high levels.

In South America, prices of wheat and maize are on the increase.
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