The Food and Agriculture Organization's Food Price Index hit the highest level in 27 months in October averaging at 197.1 points, powered by a surge in sugar prices and unexpectedly strong rises in cereals and vegetable oils prices, the FAO said.

"In terms of price levels internationally I think the situation is certainly getting closer to the levels that we had seen (in 2007/2008)," the FAO economist Abdolreza Abbassian told Reuters in a telephone interview.

"Food instability which we were threatened (with) in 2007/08 is so far absent," he said.

The FAO's Cereal Price Index which includes prices of main food staples including wheat, rice and corn, climbed to the highest level since September 2008 but still remained well below peaks seen for most of that year, according to FAO data.

The cereal and overall food supply situation in many producing and importing countries, especially in Africa, has improved since the 2007/08 crisis which triggered food riots in developing countries, Abbassian said.

"We did not have riots because of sugar or soybeans or meat and dairy in 2008, we had riots because of wheat and rice, and those elements so far are fairly balanced," he said. But increasing food price volatility was alarming and could threaten future food security, Abbassian said.

He said markets expected tightening of global wheat supplies in 2011/12 because no big increases in new plantings have emerged in Russia while in other major producers in North America and Europe wheat would have to compete for land with other profitable crops such as corn, barley and soybean.

However, the International Grains Council has forecast, that wheat plantings will rise in 2011/12.

"Higher market prices are expected to boost global wheat plantings in 2011/12, with the total harvested area projected to rise by around 3 percent," the IGC said in a monthly market report last week.

The IGC saw an increase in wheat area in the European Union and North America.

In Russia, a drop in winter wheat plantings was seen after this year's severe drought but the impact on harvested area was expected to be partially offset by higher spring wheat plantings and lower abandonment of damaged crops.

Abbassian said sharp wheat price volatility in the last few months has been confusing for farmers and would affect their planting decisions.