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World food prices reach new high

World food prices rose 3.4% between December and January to reach their highest levels since such measurements started in 1990. The Food and Agriculture Organisation (FAO) of the United Nations developed a Food Price Index twenty years ago, which is a basket of commodities that can track changes in global food prices.

The Index averaged 231 points in January, which reflected rising prices over the past seven months. All commodity groups such as cereals, oils and fats, dairy and sugar showed strong gains, with only meat remaining steady. The picture over recent years can be seen in the figure below which shows the volatility of world food prices.

Food Price Index Source: FAO

 

“The new figures clearly show that the upward pressure on world food prices is not abating,” according to FAO economist Abdolreza Abbassian. “These high prices are likely to persist in the months to come. High food prices are of major concern especially for low-income food deficit countries that may face problems in financing food imports and for poor households which spend a large share of their income on food.”

He went on to say that: “The only encouraging factor so far stems from a number of countries, where – due to good harvests – domestic prices of some of the food staples remain low compared to world prices.”

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Posted in Food price inflation

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