Thursday, March 3, 2011

global food prices Index Hits Record High In February

global food prices Index Hits Record High In February ; LONDON (MNI) - The global food prices index rose to an all time high of 236 in February, up from the 230.7 hit in January, according to the latest United Nations Food and Agriculture Organisation data.

The index, which measures monthly price changes in a basket of cereals, oilseeds, dairy meet and sugar prices has now risen for eight consecutive months.

Commenting on the report, David Hallam, Director of FAO's Trade and Market Division said "Unexpected oil price spikes could further exacerbate an already precarious situation in food markets.""This adds even more uncertainty concerning the price outlook just as plantings for crops in some of the major growing regions are about to start," he said. The FAO has recently warned of the risk of a repeat of the 2008 food crisis and has called for stronger regulation of commodities futures markets.

Increases in commodity prices, particularly for foodstuffs and energy, are causing concern across the world. Wheat prices have doubled in the past year, coal prices have surged and Brent crude oil is trading near a two-year high.

Rising prices have fuelled calls for, and heightened, the chance of near-term monetary policy tightening in many major economies, including the euro zone, the United Kingdom and China.

Recent inflation data out of China (5%) and the UK (4%) are well above the respective 3% and 2% targets.
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