Fin24

Alarm as world food prices hit record

2011-02-03 12:15

Milan - Global food prices hit a record high in January, the United Nation's Food and Agriculture Organisation (FAO) said on Thursday, adding that prices, already above the 2008 levels which sparked riots, were likely to rise further.

Up for the seventh month in a row, the closely watched FAO Food Price Index touched its highest since records began in 1990, in nominal terms, and topped the high of 224.1 in June 2008, during the food crisis of 2007/08.

The index, which measures monthly price changes for a food basket composed of cereals, oilseeds, dairy, meat and sugar, averaged 230.7 points in January, up from 223.1 points in December.

Surging food prices have come back into the spotlight after they helped fuel protests that toppled Tunisia's president in January.

Food inflation has also been among the root causes of protests in Egypt and Jordan, raising speculation that other nations in the region would secure grain stocks to reassure their populations.

Severe drought in the Black Sea last year, heavy rains in Australia and dry weather in Argentina and anticipation of a spike in demand after unrest in north Africa and the Middle East helped power grain prices to multi-year highs.

The FAO's Sugar Price Index soared to a record high of 420.2 points from 398.4 points in December.

Its Cereals Price Index, which includes prices of main food staples such as wheat, rice and corn, rose to an average of 244.8 points in January, the highest level since July 2008 but below its peak in April 2008, the data showed.

The Oils Price Index rose to 277.7 points in January from 263.0 points in December, and came close to the June 2008 record level.

The FAO has revised the entire series of the index dating back to 1990 because of a change in calculating its meat component, but June 2008 remained a major food price index peak before January 2011.

Comments
  • John - 2011-02-03 13:44

    Yet farmers say they cant survive????? Who's getting all the money then?

  • David - 2011-02-03 14:10

    It is definitely not the farmer, it is the retailer that is making the money. I was at the market this morning with a client who farms cucumbers,he sells his cucumbers at R2 each, i have seen the same cucumbers at R7-R17 in the supermarkets

  • rICK - 2011-02-03 14:18

    Our 'traditional' farmers don't get a subsidy anymore.They don't qualiy for hand outs. There may be shortage of certain foods but the rest of the guys will jump on the band wagon and up prices as well.

  • Rick - 2011-02-03 14:36

    The farmers are not getting the money John. It's the high rolling traders in stock exchanges throughout the world who make the money. They are the ones who dictate the markets including the price of oil which has a direct impact on the cost of food. That's just one of the many aspects.

  • chris - 2011-02-03 15:42

    Google "Money As Debt".

  • I told you so - 2011-02-03 16:25

    Check all the middle men, commissions, percentages, packaging, cold storage and transport costs etc along the "route" these products take to the shelves and fridges in stores. No one person/company is making all the money, all the various stages are each taking a little bit.

  • theFarmer - 2011-02-05 14:02

    John, most of you are so naive. Do yourself a favour and buy the Farmer's Weekly once a year and inform yourself properly, before making silly statements like you just did. I am a farmer (and in IT) the last 5 years, and am grateful for my IT income. David hit the nail on the head. And as Rick said, some commodities (maize etc) is speculated on in advance of harvests, and the traders (who are nothing more that lazy parasites riding) on the back of most hardworking people) make a killing. In the end they are the cause of periodic price spikes in food, as prices see-saw from speculated lows, over-correcting to highs caused by shortages. Do yourself a favour and go and see who has been doing what to the local dairy industry the last 5 years or longer, and then ask yourself why so many PRODUCERS (producer not= Clover or Parmalat) have left the industry the last 5 years, despite the dairy prices being high. Common sense would tell you that if a fairy farmer was "making a fortune" he would ride the wave and not get out

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