Food Prices Near 2008 Levels

World food prices have come close to the 2007-08 crisis levels after a spike in October, but global supplies are stronger now and cereal prices remain well below critical levels, the UN’s food agency economist said Nov. 2.

The Food and Agriculture Organization’s (FAO) 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- 08),” 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.

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