Sugar is among the items in the FAO’s food price index.

Global food prices are moving ever higher, hitting record levels last month as a jittery market reacted to unpredictable weather and tight supplies, according to a United Nations report released Thursday.


It was the seventh month in a row of food price increases, according to the United Nations Food and Agriculture Organization, which put out the report. And with some basic food stocks low, prices will probably continue reaching new heights, at least until the results of the harvest next summer are known, analysts said.

“Uncertainty itself is a new factor in the market that pushes up prices and will not push them down,” said Abdolreza Abbassian, an economist and the grain expert at F.A.O. “People don’t trust anyone to tell them about the harvest and the weather, so it has to await harvest time.”

Scattered bright spots in the report led experts to suggest that a repeat of the 2008 food riots stemming from similar sharp price increases might not be imminent. Rice was slightly cheaper and meat prices stable, they noted. But the overall uncertainty and inflation could eventually make the situation worse than three years ago, they said.

Riots and demonstrations erupting across the Middle East are not directly inspired by rising food prices alone, experts noted, but that is one factor fueling the anger directed toward governments in the region. Egypt was among more than a dozen countries that experienced food riots in 2008.

The F.A.O. price index, which tracks 55 food commodities for export, rose 3.4 percent in January, hitting its highest level since tracking began in 1990, the report said. Countries not dependent on food imports are less affected by global volatility. Still, food prices are expected to rise 2 percent to 3 percent in the United States this year.

Four main factors are seen as driving prices higher: weather, higher demand, smaller yields and crops diverted to biofuels. Volatile weather patterns often attributed to climate change are wreaking havoc with some harvests. Heavy rains in Australia damaged wheat to the extent that much of its usually high-quality crop has been downgraded to feed, experts noted.

This has pushed the demand and prices for American wheat much higher, with the best grades selling at 100 percent more than they were a year ago, Mr. Abbassian said. The autumn soybean harvest in the United States was poor, so strong demand means stocks are at their lowest level in 50 years, he said.

Brokers are waiting to see how acreage in the United States will be divided between soybeans, corn and cotton, with cotton fetching record prices, Mr. Abbassian said.

Sugar prices are also at a 30-year high, he said. Prices for cereals are rising but still below their April 2008 peak. Oils and fats are up and close to their 2008 level, and dairy is higher but still below its 2007 peak, the report said. Even positive news, like good rains in Argentina and a strong harvest in Africa, has failed to keep prices from rising.

“Food prices are not only rising, but they are also volatile and will continue this way into the future,” said Ngozi Okonjo-Iweala, the World Bank managing director.

Changing diets around the world stemming from higher incomes, especially in places like China and India, mean a greater demand for meat and better grains. Although it takes time for that to translate into higher prices globally, it does buoy demand, the experts said.

In 2009, the richest nations pledged more than $20 billion to aid agriculture in developing countries, including $6 billion for a food security fund housed at the World Bank. Just $925 million of those pledges has been paid, Ms. Okonjo-Iweala noted, because of financial problems in the donor countries. That will bring consequences, she said, as one billion people already go without sufficient food daily.

Derek Headey, an economist with the International Food Policy Research Institute, noted that in 2007 and 2008 many African countries were hit hard by soaring import bills, as were nations spread across the world, like Afghanistan, Pakistan and Ecuador.

But some of the world’s largest and poorest countries experienced rapid economic growth and only modest food inflation, so the number of people facing food insecurity in nations like China, India, Indonesia and Vietnam actually went down at that time, he said.

“This time around there is still strong economic growth in these countries, but inflation is much more of a problem,” he said. “So it is possible that the impact could be worse in 2011, especially if food prices stay high.”

It will take some months for those figures to emerge, he added.

Via New York Times