World food prices up, raising concern

Inflation concerns merged on Thursday as global food prices rose for a second straight month in February, the UN food index showed. World food prices were up one per cent month on month in February. Prices were driven by gains in cereals, vegetable oils and sugar, but were still some 10 per cent off a record high hit in February 2011, the UN Food and Agriculture Organisation said.
The FAO’s chief economist played down further rises in the near term, looking for stabilisation as crop seasons progress in main producing countries. “I don’t think the events of the last two months are going to be sustained in the coming months, although there is always a risk,” FAO’s senior economist Abdolreza Abbassian told the media. But the early (crop) indications suggest that we should not be worried too much about the return to the kind of price levels we had last year this time. We are far from that,” he said.
Food prices hit record highs in February 2011, helping to stoke unrest related to the Arab Spring. Prices have fallen since then, but their upturn in the first two months of 2012 is is raising inflation concerns. International markets have been brisk with major buying interest from Iran, paying a premium for grain in the face of toughened Western sanctions. FAO’s food price index, which measures monthly price changes for a food basket of cereals, oilseeds, dairy, meat and sugar, averaged 215.3 points in February, up from a revised 212.8 points in January, the Rome-based agency said