2 Sep 2010

World food prices at their highest in two years

1:46 pm on 2 September 2010

The United Nations Food and Agricultural Organisation says world food prices have risen to their highest level in two years.

It says the increase is due partly to a drought in Russia and to Russian government export restrictions that have brought about a surge in the price of wheat.

The Rome-based agency says its food price index shot up 5% between July and August, although it's still 38% down from its peak in June 2008.

FAO has reduced its forecast for global production of food staples in 2010, the BBC reports. It now thinks that cereal production will be 1.8% lower than its June forecast and that wheat production will be 5% lower than in 2009.

Notwithstanding those falls, it says, world cereal and wheat production levels will still be the third highest on record.

Rice production is also expected to be lower. Much of the revision is due to floods in Pakistan and lower expectations in China, Egypt, India, Laos and the Philippines.