World Food Prices: World May Face A Food Price Shock As It Hit All-Time High Record

By on Jan 6, 2011 in Business, Economy, World Comments

World Food Price Index
World Food Prices Graph
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World food prices in December has been reported the highest on records according to UN’s Food and Agricultural Organization’s (FAO) official website.

The Food Price Index consists of different commodity group price indices including dairy, meat, sugar, cereals and oil seeds. Reports show that the highest increased for December were for oils, cereals and sugar.

Based on FAO Food Price Index, prices of food commodities reached 214.7 points last month which gained a 4% increase from the previous month’s 206 points.

The increase of World food prices may disrupt supply this year and could spark a repeat of 2008’s food shortages and fears to cause riots overseas, international news sites reported .

A senior FAO economist named Abdolreza Abbassian said that the increased was alarming. However, factors that triggered food riots in 2007 and 2008 affecting more than 30 poor countries were currently not present. He also said that the agricultural commodities price would probably increase further.

Meanwhile, Daniel Gustafson, director of Washington office of the Food and Agriculture Organization of the United Nations said that the “things could become explosive again in 2011, and that’s what people are concerned about.” He also added saying that, “What will happen in 2011, whether prices will merely remain high or go up further, depends on what happens to production in the coming year.”

The rising of food prices, raises fears of global inflation that may potentially cause central banks to raise interest rates to counter it in return.

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