August 14, 2012
Global food price index sees hike after 3 months of decline

The United Nations said on Thursday that global food prices had climbed after three months of decline.{{more}}

The Food and Agriculture Organization’s (FAO) monthly Price Index rose six per cent in July, mostly driven by a surge in grain and sugar prices, and averaged 213 points, up 12 points from June.

The index measures the monthly change in international prices of a basket of 55 food commodities, including meat, dairy, sugar, and cereals, the UN said in a release.

According to the FAO, the severe deterioration of maize crop prospects in the United States, following extensive drought damage, pushed up maize prices by almost 23 per cent in July.

International wheat quotations also increased, experiencing a 19 per cent surge, due to low expectations of production in Russia, coupled with the prospects of high demand for wheat because of tight maize supplies.

However, international prices for rice remained mostly unchanged.

Untimely rains in Brazil — the world’s largest sugar exporter — largely caused the price of sugar to increase by 12 per cent, and concerns over India’s delayed monsoon and poor rains in Australia also contributed to the rebound in price.

In contrast, the prices for meat and dairy products experienced little change. Average meat prices decreased by 1.7 per cent in July, falling for the third consecutive month, while average dairy prices remained unchanged from June, after five straight months of decline.