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World food prices soar


World food prices reached new historic peak last month, according to the Food and Agricultural Organization (FAO) Food Price Index.

The commodity basket, which regularly tracks monthly changes in global food prices, averaged 231 points in January - up 3.4 per cent from December 2010.

It is the highest level since FAO started measuring food prices 21 years ago, and the index also showed prices of all monitored commodity groups recorded strong gains in January, apart from meat, which remained unchanged.

“The new figures clearly show that the upward pressure on world food prices is not abating,” said FAO economist and grains expert Abdolreza Abbassian.

“These high prices are likely to persist in the months to come. High food prices are of major concern especially for low-income food deficit countries that may face problems in financing food imports and for poor households which spend a large share of their income on food.”

However, he added that there were encouraging signs in some countries, where there have been good harvests and domestic prices of various food staples have remained low compared to world prices.

Rising food prices, though, are sure to ultimately have an impact on consumers’ confidence and their capacity to spend.

This week’s Consumer Confidence Survey in the UK by the British Retail Consortium and research company Nielsen showed 27 per cent of respondents did not have any spare money in the last quarter of 2010.

Looking at the year ahead, Group Managing Director of Nielsen UK & Ireland Chris Morley said: “We anticipate a consumer who continues to feel the pinch, who has major concerns about meeting the cost of essentials and basic living expenses - such as food, household bills and fuel - and a consumer who will continue to employ strategies to make savings.”

Published on Thursday 03 February by Editorial Assistant

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