AGFLATION: World food prices surge to an all-time high
Wednesday, January 05, 2011
From Bloomberg:World food prices rose to a record in December on higher sugar and meat costs, the United Nations said, exceeding levels reached in 2008 that sparked deadly riots from Haiti to Egypt. An index of 55 food commodities maintained by the Food and Agriculture Organization climbed for a sixth month to 214.7 points, above the previous all-time high of 213.5 set in June 2008, according to a monthly report posted on the Rome-based UN agency's website today. The gauges for sugar and meat prices advanced to records. Sugar climbed for a third year in a row in 2010, and corn jumped the most in four years in Chicago. Food prices may gain further unless global grain production rises "significantly" in 2011, the FAO said Nov. 17. At least 13 people died last year in Mozambique in protests against planned increases in bread and water prices. "There is still, unfortunately, the potential for grain prices to strengthen on the back of a lot of uncertainty," Abdolreza Abbassian, senior economist at the FAO, said by phone today. "If anything goes wrong with the South American crop, there is plenty of room for them to increase further." Cereals, Cooking Oils The FAO's food-price indicator climbed from 206 points in November. Its gauge for sugar prices reached 398.4 points last month, increasing from 373.4 in November. The meat-price index rose to 142.2 points from 141.5. The agency's cereal-price index jumped to 237.6 points in December, the highest level since August 2008, from 223.3 the previous month. The indicator for cooking oils advanced to 263 points, the highest since July 2008, from 243.3. The index for dairy prices rose to 208.4 points from 207.8. Global grain output will have to rise at least 2 percent this year to meet demand in 2011-2012 and avoid further depletion of stocks, the UN agency has said. Concern about dry weather in Argentina helped corn prices to jump 52 percent in Chicago last year. The basis for the FAO index is 2002-04. The gauge includes commodity quotations that the agency considers representative for international food prices.