Global food prices rebounded in January, demonstrating the volatility in the international food markets, after falling for six months since July, United Nation's Food and Agriculture Organisation (FAO) said on Friday.
FAO’s 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," said FAO senior grains economist Abdolreza Abbassian.
The rise in prices, despite an expected record harvest and an improved stocks situation highlights the unpredictability in global food markets, he added. The index averaged 214 points in January, nearly two per cent higher than in December. The rebound represented the first upturn in the index since July, but remained seven per cent below the value last year, it added.
According to FAO, the rise in prices also reflects the weather playing its part in affecting agriculture production. "The poor weather is currently affecting key growing regions like South America and Europe. It has played a role and remains a cause for concern," Abbassian said.
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.