Jan food prices close to record high

By: SVETLANA KOVALYOVA

MILAN – World food prices in January are expected to be close to record highs seen in December when they climbed above peaks which triggered riots in several countries in 2008, an economist at the United Nations' food agency said yesterday.

“ The FAO’s expectation is that the January index would be very close or slightly below December,” Abdolreza Abbassian, UN’s Food and Agriculture Organisation economist, said.
The FAO Food Price Index, which measures monthly price changes for a food basket composed of cereals, oilseeds, dairy, meat and sugar, hit an all-time high of 214,7 points in December, above a previous record set in June 2008 during the food crisis. High food prices have come back into the spotlight after they fuelled protests in Tunisia that led to the fall of the president there earlier this month and have spilled over to Egypt.
World leaders at the World Economic Forum in Davos last week warned rising food prices risked stoking more unrest and even war. French President Nicolas Sarkozy reiterated calls for regulation to rein in speculation and volatility.
According to preliminary estimates, prices of sugar, some grains and oilseeds in January were slightly below levels seen in December, Abbassian said in a telephone interview with Reuters.
He said the FAO uses spot and physical prices to calculate the index and does not use futures prices which rallied in January.
US corn and soybean futures topped out at 2-1/2 year highs in January and US wheat futures hit a 29-month high last Thursday as buyers scrambled for supplies amid harsh weather in major producing countries such as Australia and Russia.
Wheat futures on Euronext climbed in January to the highest level since March 2008, powered by increased export demand as fears of short supplies and social unrest prompted importers, especially from North Africa and Middle East, to build up inventories. – Nampa-Reuters

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