World food prices up 3.4% in January

World food prices rose by 3.4% in January, reaching a new historic peak according to an index produced by the United Nations Food and Agriculture Organisation.

Across a basket of the main food commodities it averaged 231 points in January, the highest level since the measure was begun in 1990. All the main commodities rose strongly except for meat, which was unchanged from December.

Dairy and sugar rose most in January, with dairy up by 6.2% on high global demand and tight world supplies pushing the sugar index up by 5.4% .

A 5.6% rise in the oils and fats index took it close to the record level of June 2008, reflecting the tightening supply and demand balance across all oilseeds.

High prices were likely to persist in the months to come, said FAO economist Abdolreza Abbassian, although good harvests in some countries meant that domestic prices of some of the food staples remained low compared to world prices.

Price rises for wheat and maize pushed the cereal price index up by 3% in January but this was still 11% lower than the peak of 2008. At the same time a slight fall in rice prices limited the overall cereal index rise.

The meat price index was held steady by falling European meat prices after consumer confidence was knocked by the dioxin feed contamination in Germany, although some export prices from Brazil and the US rose.