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Global food prices hit record high

World food prices last month climbed to their highest ever levels, said the United Nations Food and Agricultural Organisation.

Six months of back-to-back price rises pushed the organisation’s Food Price Index above the previous record of 2008 when spiralling costs triggered riots in several poor countries including Cameroon, Haiti and Egypt.

Fuelled by surging sugar, cereals and oil prices, the index was the highest since records began in 1990, and topped the high of 213.5 in June 2008, during the 2007/08 food crisis.

In December, the index, which measures monthly price changes for a basket of cereals, oil, seeds, dairy, meat and sugar, averaged 214.7 points, up from 206.0 points in November.

The organisation said the increase was not yet a crisis. But its senior economist, Abdolreza Abbassian said that the situation was “alarming”. He told The Financial Times newspaper: “It will be foolish to assume this is the peak.

Kenyan market trader Anastasia Buvi said she has passed most of the price rises on to her customers. “People don’t complain because everywhere else everything costs more, but we still feel it is expensive,” she said.
I need to find a lot of money to look after my two children and I don’t have it.

The price of wheat in particular has risen sharply, said the International Food Policy Research Institute. This is because of wildfires last year in Russia, which resulted in an export ban, the institute's Maximo Torero, told the BBC.

And the recent floods in Australia, which also makes up 11 per cent of global exports, has made the problem worse, he said.

More US backing for biofuels alongside droughts in Argentina, the world's second biggest corn exporter apart from the US, have also pushed up the price of corn, Mr Torero said.

"The situation is very tight. If we have more natural disasters, we could have a problem," he said.

There were more riots over food prices in Mozambique in September last year. And the worry now is that the price spike “will have an effect almost all over the world but especially in poor countries where food and energy are the major things people spend their money on," said economic adviser George Magnus.

"There's a risk, I wouldn't say a huge risk, but some risk of higher energy prices and higher food prices being very destabilising in some countries.

"We saw that in 2008 and in Mozambique last year and it's something to watch."

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