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Rediff.com  » Business » World food prices arrest six-month fall, rise in Jan: FAO

World food prices arrest six-month fall, rise in Jan: FAO

February 10, 2012 15:48 IST

Global food prices rebounded in January this year demonstrating the volatility in the international food markets, after falling for six months since July, 2011, United Nation's body FAO said on Friday.

The FAO (Food and Agriculture Organisation) Food Price Index rose in January with the price of oils increasing the most, followed by cereals, sugar, dairy products and meat, FAO said in a statement.

"There is no single narrative behind the food price rebound ... Different factors are at play in each of the commodity groups," FAO Senior Grains Economist Abdolreza Abbassian said.

The increase in prices, despite an expected record harvest, an improved stocks situation and after six months of falling or stable prices, highlights the unpredictability prevailing in global food markets, he added.

The Food Price Index averaged 214 points in January 2012, nearly 2 per cent up from December. The rebound represented the first upturn in the index since July 2011 but it remained 7 per cent below its corresponding value last year, it added.

FAO's food price index is a monthly measure of the change in international prices of cereals, oilseeds, dairy products, meat and sugar.

According to the global body on farm sector, rise in prices also reflects the weather phenomenon playing its part in affecting agriculture production.

"But one reason is poor weather currently affecting key growing regions like South America and Europe. It has played a role and remains a cause for concern," Abbassian pointed out.

Prices mostly reflected worries about weather conditions affecting 2012 crops in several major producing regions. Fears of decline in export supplies in the Commonwealth of Independent States also played a part, FAO said.

FAO in its latest forecast has said that the world cereal production in 2011 is expected to be more than sufficient to cover anticipated utilisation in 2011-12.

"Production is expected to reach 2,327 million tonnes, up 4.6 million tonnes from the last estimate in December, 2011. That would be 3.6 per cent more than in 2010 and a new record," it had said.

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