World Food Prices reach a new high in February

The FAO Food Price Index (FFPI) rose for the eighth consecutive month, averaging 236 points in February 2011, up 2.2 percent from January and the highest (in both real and nominal terms) since January 1990, the inception date of the index.

Except for sugar, prices of all other commodity groups monitored registered gains in February with dairy products and cereals climbing the most.

The FAO Cereal Price Index averaged 254 points in February, up 3.7 percent from January and the highest since July 2008. The increase in February mostly reflected further gains in international maize prices, driven by strong demand amid tightening supplies, while prices rose marginally in the case of wheat and fell slightly in the case of rice.

The FAO Dairy Price Index averaged 230 points in February, up 4 percent from January, but well below its peak in November 2007. Firm world demand continues to underpin prices. The earthquake recently registered in New Zealand, a major supplier, did not seem to have affected world availability of dairy products.

The FAO Oils/Fats Price Index rose marginally to 279 points in February, standing just below the peak recorded in June 2008. The slight increase is in contrast to a series of sharp increases since last year, reflecting a recovery in global supply prospects.

The FAO Meat Price Index averaged 169 points in February, up 2 percent from January, owing to higher quotations for prices of pig meat (Europe) and sheep meat (Oceania). The trend in rising beef prices appears to have stalled due to import disruptions in several key markets.

By contrast, the FAO Sugar Price Index averaged 418 points in February, slightly below the previous month but still 16 percent higher than this time last year. International sugar prices remain high and volatile, mostly driven by tight supplies in major sugar exporting countries.