UN: Global Food Prices Continue To Surge





Rising Food Prices - Illustration and ChartAccording to the FAO (Food and Agriculture Organization) of the United Nations, global food prices hit a record high for the second straight month in February.

The FAO publishes something called the Food Price Index. According to FAO.org, the FAO Food Price Index is "a measure of the monthly change in international prices of a basket of food commodities". The FAO Food Price Index (FFPI) is made up of by five smaller indices - The Cereal Price Index, the Dairy Price Index, the Oils/Fats Price Index, the Meat Price Index and the Sugar Price Index.

According to the FAO, the Food Price Index posted a value of 236 in February, up from 231 the month before. This is the second straight month in which the Food Price Index has hit an all-time high (both in nominal and real terms), and the eighth straight month in which it has posted an increase. The last time that the Food Price Index fell was June of 2010.

From 2000 to February of 2011, the Food Price Index has nearly tripled, trading from 90 up to its current level of 236. Let's look at the progression of the FFPI from 2000-2010:

2000 - 90
2001 - 93
2002 - 90
2003 - 98
2004 - 112
2005 - 117
2006 - 127
2007 - 159
2008 - 200
2009 - 157
2010 - 185

The spike in food prices in 2007 and 2008 caused riots throughout the world - we are now comfortably above those levels.

Let's now look at how the index has progressed over the past year:


Food


February 2010 - 176
March 2010 - 168
April 2010 - 170
May 2010 - 170
June 2010 - 168
July 2010 - 172
August 2010 - 183
September 2010 - 194
October 2010 - 205
November 2010 - 213
December 2010 - 223
January 2011 - 231
February 2011 - 236

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Four of the five indices that make up the FFPI posted increases in February, with only the Sugar Price Index posting a decline.

A number of different factors, including stockpiling, rising oil prices, increased demand and political unrest, have contributing to the spike in food prices over the past year.

Source: FAO.org




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