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Global food prices rose 6% in July

Thursday 09 August 2012 19:00

Extreme weather sparked a 6% rise in global food prices in July after three months of decline, the UN Food and Agricultural Organisation said.

The FAO Food Index, which measures the monthly change in the international prices of a basket of food commodities, averaged 213 points, up 12 points from June.

But that was still well below the peak of 238 points reached in February 2011.

The index's sharp rebound was mostly driven by a surge in grain and sugar prices.

International prices of meat and dairy products were little changed. However, dairy prices averaged 173 points in July, unchanged from June, after five straight months of decline.

Drought in the USA hit maize crops hard, with prices rising 23% in July.

Cereal prices surged 17% and wheat prices rocketed 19% after Russia downgraded its outlook for harvest.

Weather concerns in Brazil, India and Australia have also seen a sharp increase of about 12% in sugar prices, the FAO added.

Food analysts warned the surge in prices could provoke similar food crises that affected countries in 2007-2008, including Haiti and Egypt, which saw violent street protests.

FAO senior economist and grain analyst Abdolreza Abbassian said: "There is a potential for a situation to develop like we have back in 2007-2008."

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