See More

World food prices stabilise

Sep 06 2012 12:08 Reuters

Related Articles

How can motorists survive the next round of petrol and resultant food price hikes?

FNB: Signs of food price rise

Positive July PPI surprise but food a risk

US drought: Obama calls for new farm bill

Another food crisis looms - expert

Bonds yields rise on oil, food prices


Rome - World food prices stabilised in August at levels close to those reached in the food crisis of 2008, and global grain stocks are likely to shrink this year as cereal crop output falls short of what is needed, the United Nations food agency said on Thursday.

FAO Director General Jose Graziano da Silva called for international action to calm markets but also said the August price index, which remained unchanged from July, provided some cause for optimism.

Earlier on Thursday, Russian Deputy Agriculture Minister Ilya Shestakov said G20 countries would hold a rapid response meeting on the grain market next month.

The worst US drought in more than half a century and poor crops from the Black Sea bread basket have sent grain prices to record peaks, raising alarm over a potential repeat of the crisis in 2008 that sparked riots around the world.

The FAO Food Price Index, which measures monthly price changes for a food basket of cereals, oilseeds, dairy, meat and sugar, averaged 213 points in August, unchanged from July, FAO said in its monthly update.

Although the index was below a peak of 238 points in February 2011, when high food prices helped drive the Arab Spring uprisings in the Middle East and North Africa, it is still close to levels during the food price crisis in 2008.

"Although we should remain vigilant, current prices do not justify talk of a world food crisis. But the international community can and should move to calm markets further," Graziano da Silva said in a statement.

"We are reassured that the drought problems in the U.S. will not pull us into a similar situation that we had in 2008," he said.

The FAO said this week that swift international action could still prevent a catastrophe from developing. It has urged countries to review their biofuel mandates and also warned against panic buying and restrictions on exports.

The Rome-based agency said it had cut its 2012 world cereals output forecast by 4% to 2.295 billion tonnes from a previous estimate of 2.396 billion tonnes due to the worsening prospects caused by the severe U.S. drought.

The agency said global cereal output was insufficient to fully cover the 2012-13 marketing season, indicating a larger-than-expected draw down of stocks.

It added that world cereal stocks would fall sharply, forecasting 2013 ending stocks at 503 million tonnes, down 6% from its July forecast.

A mix of high oil prices, growing use of biofuels, speculation on commodity markets and export restrictions pushed up food prices in 2007/08, sparking unrest in countries including Egypt, Cameroon and Haiti.

G20 nations held a conference call last week to discuss the global food price surge but had said they would wait for a mid-September crop report from the US Department of Agriculture before deciding whether to take joint action, France's farm minister said last week.

*Follow Fin24 on Twitter, Facebook and Google+.

un  |  fao  |  food prices



Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Add your comment
Comment 0 characters remaining

Company Snapshot

We're talking about:


Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.

The Fast and Furious R40 million

With the Fast and the Furious 7 hitting South African cinema’s this April, all eyes are on the cars and we’re in for a treat!


Luxury living

This is the most expensive burger in the world!
Exclusive food items that WILL break the bank
Top 10 most expensive homes in the world
You can permanently live on a ship and sail the world!

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

How will you manage Vodacom’s price hike for contracts?

Previous results · Suggest a vote