Food prices have jumped to the same rate of increase as in the second half of 2009, according to the United Nations’ Food and Agriculture Organisation (FAO). The latest FAO food update showed a 5% increase in international food prices for August, taking the Global Food Index to its highest level since September 2008.
The index remains lower than during the food crises of June 2008 when prices reached record levels, but the trend is again moving in an upward direction and this is expected to continue into 2011. High wheat prices impacting on futures for other grains is claimed to be the driving factor in the surge, but today’s results of Fonterra’s latest auction have added a 17% rise in dairy prices to the problem.
Higher sugar and oilseed prices have also contributed, with the only positive being a stable rice market with only slight price increases expected over the next 12 months.
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