World food prices rose in September and are seen remaining close to levels reached during the 2008 food crisis, the United Nations’ food agency said, while cutting its forecast for global cereal output.
The worst drought in more than 50 years in the US sent corn and soybean prices to record highs over the summer, and, coupled with drought in Russia and other Black Sea exporting countries, raised fears of a renewed crisis.
Grains prices have retreated in recent weeks due to rapid harvest progress and concerns about weak demand in a slowing global economy. But the Food and Agriculture Organization’s (FAO) price index, which measures monthly price changes for a food basket of cereals, oilseeds, dairy, meat and sugar, rose 1.4 percent to an average of 216 points in September after remaining stable at 213 points in August.
The rise reflected mainly higher dairy and meat prices, with more contained increases for cereals, it said.
“Prices are remaining high... prices are sustained, it’s highly unlikely we will see a normalization of prices anytime soon,” FAO senior economist Abdolreza Abbassian said, according to a Reuters report.
He said, however, that it was not clear whether the small increase in September meant prices were now on an upward trend, but he expected volatility in markets could intensify in coming months.
Parmjit Singh, head of the food and drink sector at law firm Eversheds, said higher prices would place further pressure on squeezed international food supply chains.
“Manufacturers and producers will naturally want to pass on increased costs to their clients but they will meet with stiff resistance from retailers who are reluctant to increase checkout prices for increasingly value-conscious customers,” Singh said in remarks published in the Reuters report.
Food prices rise, stay near crisis levels
