FAO Finds Global Food Prices Hiked on Poor Weather and Ukraine Tensions
Global food prices increased to the highest level in about a year in March, due primarily to unfavorable weather conditions in the US and Brazil and geopolitical tensions in the Black Sea region.
Food and Agriculture Organisation (FAO), the United Nations food agency, said its index measuring monthly price changes food items rose sharply to an average of 212.8 in March, up 4.8 points or 2.3% from the previous month. This is the highest level since May 2013.
"The Index was influenced, as expected, by unfavourable weather conditions in the US and Brazil and geopolitical tensions in the Black Sea region," Abdolreza Abbassian, FAO Senior Economist, said in a statement.
"The Food Price Index looks at March trends. Since then, the initial fear over disruptions in grain shipments from Ukraine has subsided. Also, markets have started to discard any negative impacts that the current difficult domestic economic conditions may bear on plantings or harvests in 2014,"
The index measures monthly price changes for a basket of cereals, oilseeds, dairy, meat and sugar. The latest index saw prices increase in all groups except dairy, which fell for the first time in four months, declining 2.5% in March.
A sub-index measuring cereal prices rose 5.2% in March, while the sugar price index rose 7.9% from the previous month.
The vegetable oil price index averaged 204.8 points in March, up another 7 points from February and the highest level seen in 18 months. The meat price index averaged 185 points in March, up 2.7 points, as dry weather in both Australia and the US affected beef production. In addition, prices of pork also rose partly due to concerns over the Porcine Epidemic Diarrhoea virus.
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