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Mar-04-2011

Food prices reach 20-year highs

(topic overview)
CONTENTS:

The oil price of the Organization of the Petroleum Exporting Countries had jumped back above the 110-dollar mark at mid-week, amid unrest in oil-rich Libya. (More...)
Tom Hind at the National Farmers Union said it was likely that food prices were likely to continue climbing all year, after many shoppers have already been hit with jumps in the price of eggs, orange juice, chocolate and other key food items. (More...)
FAO and other food market experts are starting to acknowledge that biofuel policies supporting the ethanol industry in the United States are a strong factor behind the rise of corn prices. (More...)
PowerShares DB Agriculture (DBA) is more of a pure food commodity play as it invests in a basket of agricultural futures such as corn, soybeans, sugar, cattle, cocoa, coffee, cotton, lean hogs and wheat. (More...)
The FAO price index increased 2.2% to an average 236 points, with all commodity groups posting gains expect for sugar. (More...)
Food will also be more expensive to transport. (More...)
The 2.2% increase from January was, for a second month, led by the dairy sector, where prices rose by 4%, boosted by "firm world demand". (More...)
Of all the commodities groups monitored by the FAO, which include cereals, dairy, meat and oils, only sugar dipped last month to 418 points, slightly below the previous month but still 16% higher than February 2010. (More...)
Besides raising farm fuel bills, oil costs also have a bearing on the costs of fertilizers and sprays, so posing a significant upward threat to growers' cost of production. (More...)

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The oil price of the Organization of the Petroleum Exporting Countries had jumped back above the 110-dollar mark at mid-week, amid unrest in oil-rich Libya. The Cereal Price Index, which monitors the prices of food staples such as wheat, rice and maize, rose by 3.7 percent in February to 254 points, its highest level since July 2008. In the face of growing demand and a decline in world cereal production in 2010, global cereal stocks this year are expected to fall sharply because of a decline in inventories of wheat and coarse grains, the Rome-based FAO said. ^[1] The Food and Agriculture Organization price index rose by 2.2%the eighth consecutive rise since Juneto an average of 236 points last month, the highest record in real and nominal terms since the agency started monitoring prices in 1990. Global cereal supplies are also expected to tighten sharply this year due low stock levels, the FAO said. The body raised its estimate for world cereal production in 2010 by eight million metric tons from its December estimate to 2.2 billion tons but said it expects that to be outpaced by an 18 million-ton increase in world consumption. ^[2]

"Unexpected oil price spikes''could further exacerbate an already precarious situation in food markets," said David Hallam, Director of FAO's Trade and Market Division.'' '''This''adds''even more uncertainty''concerning the price outlook just as plantings for crops in some of the major growing regions are about to''start," he added. (Read On The Verge Of A Global Food Crisis ). The cereal index, which hit its highest level since 2008, was the focus of the report, as the FAO estimated that a tightening market on the back of a weak year for cereal production in 2010 will put additional pressure on prices.'' ^[3] "Unexpected oil price spikes could further exacerbate an already precarious situation in food markets," said David Hallam, Director of FAO's Trade and Market Division. "This adds even more uncertainty concerning the price outlook just as plantings for crops in some of the major growing regions are about to start," he added. FAO foresees a sharp fall in global cereal stocks this year in the wake of growing demand and low production last year. ^[4]

FAO economist Abdolreza Abbassian said global food prices are likely to remain close to record highs until the condition of new crops is known, adding that jumps in the oil price could have a bigger impact on grain markets, which have seen benchmark U.S. wheat prices surge 60 percent in the year to March. "Until we know about new crops, that means waiting at least until April, our view is don't expect any major corrections in these high prices, expect even more volatility now that oil has joined the crowd," Abbassian said in a telephone interview. ^[5] MILAN (Reuters) - Global food prices are likely to remain close to record highs hit in February until the condition of new crops is known, United Nations' Food and Agriculture Organization (FAO) economist told Reuters on Thursday. "Until we know about new crops, that means waiting at least until April, our view is don't expect any major corrections in these high prices, expect even more volatility now that oil has joined the crowd," Abdolreza Abbassian said in a telephone interview. An earlier announced rise in global food prices to record highs in February was driven mostly by external factors, such as oil, currency and political instability, he said. ^[6] Global food prices rose for an eighth straight month on the back of a tightening supply of wheat and other cereal crops, and the current spike in oil costs could drive record prices even higher, the United Nations' Food and Agriculture Organization warned today. ^[7] Associated Press PHOTOS The U.N.' s Food and Agriculture Organization said Thursday that global food prices, including wheat, reached new highs in February and warned that oil price spikes could provoke further increases. ST. LOUIS ''' Prices for major crops climbed Thursday as a U.N. agency said food costs are now at their highest point since the agency began tracking them 20 years ago. ^[8] The U.N. arm responsible for tracking food costs says that global food prices have hit the highest levels since the organization first started''following them in 1990, rising 2.2 percent in February alone. Oil shortages linked to unrest in the Middle East were largely responsible for escalating prices, but they've also exacerbated a broader trend: Wheat, rice, and maize prices have increased by 70 percent over the past year; and coffee and sugar costs have also skyrocketed. The U.N.' s Food and Agriculture Organization noted that while prices have generally been stable for the past two decades, they've taken off dramatically over the past three years. ^[9]

Unexpected rise in oil cost could further exacerbate global food prices that touched a record high in February this year, UN body FAO said on Thursday even as it forecast the global wheat output to rise by around three per cent in 2011. Global food prices soared for the eighth consecutive month in February this year on back of rising prices of almost all the commodities except sugar, Food and Agriculture Organisation (FAO) said. ^[10] Rapacious bankers stand accused of artificially pushing up food prices to make a quick buck about 80 per cent of all trade in food is now purely speculative. Firms such as Goldman Sachs, Merrill Lynch, Deutsche Bank and others are moving out of property, stung by the sub-prime crash, and are now buying thousands of tons of commodities such as soy and cocoa, speculating in future price movements on the Futures markets, and making a profit when the price goes up. A market in speculation on the price of food was born after the rules governing such trades were relaxed some years ago, with the result that thousands of the world's poorest are starving because prices have been pushed up around the world. Add to this rising oil prices (meaning transport of food is more expensive, as well as pushing up harvesting costs), increased shipping costs (caused in part by extra insurance premiums in turn sparked by an epidemic of piracy) and it is easy to see why food is currently so dear. It is the long-term trends that have the economists worried, the trends identified by John Beddington in his 'perfect storm' predictions. The world's population is increasing it will hit seven billion later this year and peak at maybe 9billion in three or four decades' time. That is an extra two billion mouths to feed on top of today's total and the result, even if nothing else changes, is bound to be higher food prices, especially for basics such as wheat, rice and soya. ^[11]

'''We just need to be prepared for some additional costs coming up here. Hopefully the retailers, the food production industry, the farmers, consumers ''' we can all work through this cycle and keep the abundance of products there but keep the prices as low as we can at the same time,''' said Lehman. Global food prices have reached their highest point in 20 years and could increase further because of rising oil prices stemming from the unrest in Libya and the Mideast, a U.N. agency warned today. ^[12] Global food prices are the highest in more than 20 years, a United Nations agency said in a report released Thursday -- as rising oil prices stemming from civil unrest in the Middle East have caused the cost of items like cereal, dairy products and meat to increase. ^[13] The cost of that production has gone sharply higher along with the new price spikes in oil. It is easy to forget, the current wave of protests, and ultimately regime change in the Middle East began with a food seller in Tunisia who immolated himself over the state of the economy and his anger over the government. Now the United Nations reports that global food prices have reached their highest point in 20 years. ^[14] The cost of some items, such as romaine lettuce, has jumped in recent weeks. World food prices are reaching record highs and the parent company of Loblaws says prices at their grocery stores will be going up as of April 1. The United Nations Food and Agriculture Organization says global food prices reached their highest point in the last 20 years in February. ^[15] Mar 03, 2011 (SmarTrend News Watch via COMTEX) -- The United Nations Food and Agriculture Organization (FAO) reported Thursday that global food prices rose for the 8th straight month in February, climbing to a record high since the agency started monitoring prices in 1990. ^[16] The United Nations warns that global food prices are rising at alarming levels.'' The Food and Agriculture Organization says the cost of staples such as cereals, meat and dairy products has risen for eight straight months to reach a new high in February.'' ^[17]

Prices for cereals, dairy products, meats and all other commodities in the index rose. The U.N.' s Food and Agriculture Organization says it expects cereal prices to be sharply higher this year, due to shrinking inventories of wheat and coarse grains on top of growing demand.Global food prices have been moving higher in recent months as demand from emerging nations increases, and bad weather in certain parts of the world has cut the supply of key agricultural commodities. ^[18] The UNs Food Price Index rose 2.2% in February to the highest level since the UNs Food and Agriculture Organization (FAO) began monitoring prices in 1990. It also warned that spikes in the oil price could make the "already precarious" situation in the food market even worse. ^[19] According to Reuters, the Food Price Index tracked by the U.N. Food and Agriculture Organization (FAO) set a second straight record in February, thanks to tight supply and higher costs for grains. It further warned that prices were likely to surpass the levels in 2008 that ignited food riots in many countries. ^[20] The U.N. Food and Agriculture Organisation's Food Price Index hit its second straight record last month, driven by rising grain costs and tighter supply to further pass peaks seen in 2008 when prices sparked riots in several countries. ^[5]

MILAN, March 3 (Reuters) - The FAO index of global food prices climbed to a fresh record high in February, above 2008 peaks when high food prices sparked riots in several countries, U.N Food and Agriculture Organisation data showed on Thursday. ^[21] The global food price index hit a new record high for the third straight month, the Rome-based Food and Agriculture Organization said today. ^[22] World Food Organisation (Food and Agriculture Organization / FAO) yesterday said the global food price index in February reached 236 points, or up 2.2 percent compared to January of 231 points. ^[23] Global prices have surged 2.2 percent just in the past month, according to the U.N.' s Food and Agriculture Organization in Rome. The FAO's index, which measures the price of staple food items and big commercial crops like corn and soybeans, reached its highest level since 1990. ^[24] Aid group Oxfam called the increases “deeply worrying. The Food and Agriculture Organization said in a statement that its food price index was up 2.2 percent last month, the highest level since the agency started monitoring prices in January 1990. It also was the eighth consecutive month that food prices rose, the Rome-based agency said. ^[25] The Food and Agriculture Organization price index rose by 2.2 percent to 236 points in February, making it the eighth consecutive rise since June 2010. This is the highest record since the agency began monitoring food prices in 1990. ^[26] The FAO Food Price Index averaged 236 points in February, up 2.2 percent from January, the highest record in real and nominal terms since FAO started monitoring prices in 1990. The Cereal Price Index, which includes prices of main food staples such as wheat, rice and maize, rose by 3.7 percent in February to 254 points, the highest level since July 2008. ^[27] Already, food prices hit a record high in January according to the FAO. Rising 3.4 percent since December, prices reached the highest point since tracking began in 1990. While many fear a food crisis similar to the one in 2008-2007, experts say the world has more food in reserve this time around and gasoline, at least for now, remains cheaper. If China loses its winter wheat that could scuttle any hopes of avoiding another price rise in crop staples. ^[28] The FAO also recently released figures showing that global food prices have hit record highs, rising 2.2 percent in February from the previous month. Prices for global cereals such as wheat and corn have risen drastically (60 and 93 percent, respectively) over the past year due to a succession of weather problems that diminished harvest prospects. ^[29] MILAN, March 3 (Reuters) - Global food prices hit a record high in February, the United Nations said Thursday, warning that fresh oil price spikes and stockpiling by importers keen to head off popular unrest would hit already volatile cereal markets. ^[30] The United Nations warned Thursday that with global food prices at a record high, more increases in the cost of oil and a drive by importers to stockpile food would cause problems on the cereal markets. ^[20]

Global food prices rose for an eighth straight month, and the current spike in oil costs could drive record prices even higher, the U.N. Food and Agriculture Organization warned. ^[7] World food prices rose to a record in January, according to the U.N.' s Food and Agriculture Organization and its Food Price Index. ^[31] World food prices rose 2.2% in February from the prior month to a record high, according to the United Nation's Food and Agriculture Organization price index. ^[32] Above: The Food and Agriculture Organization of the United Nations (FAO) Food Price Index is a measure of the monthly change in international prices of a basket of food commodities. ^[12]

Food crisis 2011?: drought in China could push food prices even higher (02/09/2011) The UN's Food and Agriculture Organization (FAO) has warned that a drought in China could devastate the nation's winter wheat crop and further inflate food prices worldwide. ^[28]

The World Bank estimates that sharply higher food prices have driven 44 million people into poverty in developing nations since last June. The '''dual-price shock''' of abruptly rising food and oil prices has jolted transportation costs upward, raising not only bread prices at Metro and Loblaws, but those of produce trucked from California. In the main, this is a climate-related crisis, traced to drought in major grain exporting nations Russia, China and Argentina, and to epic flooding in Australia and Canada. Saskatchewan endured such persistent and torrential downpours last year that some 10 million acres of wheat could not be planted. ^[33] WSJ's Jake Lee and Asia Heard on the Street Editor Mohammed Hadi discuss how Asian countries are coping. International export prices of major grains are already more than 70% higher than this time last year after a succession of weather problems in key producers slashed hopes for the world harvest. The FAO's cereal-price index, which includes prices of main food staples such as wheat, rice and corn, rose by 3.7% to 254 points. Mr. Abbassian said the increase in oil prices has made planting crops such as corn more attractive as they can be converted into fuel substitute ethanol, taking away crucial acreage from crops like wheat next season. ^[2] "Unexpected oil price spikes could further exacerbate an already precarious situation in food markets," David Hallam, Director of FAO'''s Trade and Market Division, said in a press release. "This adds even more uncertainty concerning the price outlook just as plantings for crops in some of the major growing regions are about to start." Given the complexity of world markets and agriculture, experts have pointed to a number of reasons behind the current food price rise including higher meat, dairy, and egg consumption, the commodity boom, fresh water scarcity, soil erosion, biofuels, growing human population, and climate change linked to extreme weather events such as last year's heatwave in Russia. ^[28] Rome - World food prices in February continued to break records by increasing for the eighth consecutive month, amid concern that a spike in oil prices could exacerbate the situation, the United Nations' Food and Agriculture Organisation (FAO) said Thursday. ^[1] The UN agency warned that the unexpected surge in oil prices, triggered by widespread political unrest in the Middle East, could add to the woes. FAO said that its food price index averaged 236 points in February, up 2.2% from January, the highest record in real and nominal terms, since FAO started monitoring prices in 1990. ^[4] The UN Food and Agriculture Organisation's (FAO's) food price index averaged 236 points in February, a record, up 2.2 per cent from January and rising for the eighth month in a row. ^[34] Food price index, a measure of the monthly change in international prices of a basket of food commodities, averaged 236 points in February, up 2.2 per cent from January. This is the highest record in real and nominal terms since FAO started monitoring prices in 1990, FAO said on its Web site. ^[10]

The United Nations Food and Agricultural Organisation said record food prices in December were 25 per cent higher than a year earlier. The warning follows a key world Food Price Index reaching a record 215 points in December, up 4 per cent from November and one point above its previous record during the food crisis in 2008. ^[5] The FAO Food Price Index was up 2.2 per cent from January, averaging 236 points - a record, in real and nominal terms, since FAO started monitoring prices in 1990. ^[1]

The FAO's food price index reached a second straight record last month, passing the highs of 2008 when prices sparked riots in several countries. It was also the eighth consecutive month that food prices had risen.Oil prices affect food markets in many ways, from production to transport costs. ^[35] The FAO's food price index climbed 2.2. percent in February, with the costs of every food group but sugar showing an increase, the agency said. Food prices are now at the highest level since the U.N. began to measure them, both in real dollar terms and adjusted for inflation. ^[7] FAO said that the increase in dairy products up to four percent compared to the previous month was the highest among other foodstuffs, but still below the increase in 2007. According to FAO, the general increase in world food prices are also affected by the continued strong oil prices and bad weather conditions in countries such as China and Russia as well as the emergence of speculation in commodity markets. ^[23] Global food prices are the highest in 20 years and could increase further because of rising oil prices, a U.N. agency warned Thursday. ^[25]

Of more concern is how next year's global harvest will shape up as rising oil prices make diverting grain for biofuels more appealing. "The oil factor, which has so far not been a driving factor this season, could become an element like it was in 2008," said the secretary of the FAO's Intergovernmental Group on Grains Abdolreza Abbassian. "It's very unlikely we will see a food crisis in 2010-11 but we can't exclude such a situation in 2011-12." ^[36] While the world isn't yet facing a food crisis, the secretary of the FAO's Intergovernmental Group on Grains, Abdolreza Abbassian, said the recent rise in Brent oil prices to above $120 a barrel could create the same potent mix of factors that pushed grain prices to record highs three years ago. "The oil factor, which has so far not been a driving factor this season, could become an element like it was in 2008," he said. "It's very unlikely we will see a food crisis in 2010-11 but we can't exclude such a situation in 2011-12." ^[2] While the Organization for Economic Cooperation and Development says the relatively smaller increase in rice prices (3.4 percent) is helping to stave off a crisis on the scale of what occurred in 2008, the secretary of FAO'''s Intergovernmental Group on Grains, Abdolreza Abbassian, says spikes in oil prices resulting from unrest in Libya and the Middle East could make an '''already precarious''' food situation much worse, possibly leading to a food crisis in 2011-2012. While the three agencies acknowledge there are no universal solutions to the current situation, they emphasize increasing food production, mainly by supporting small-scale farmers. They also recommend investing more in the agricultural sector in the long term and creating more efficient marketing and delivery channels for fresh food. ^[29] While higher food prices mean many people in the developed world will face larger bills at the supermarket, it could also push the number of chronically hungry people over the 1 billion mark, meaning roughly one-seventh of the world's population could lack food security. The index may climb even higher this month, given the spike in oil prices due to geopolitical tensions. "The oil factor, which has so far not been a driving factor this season, could become an element like it was in 2008," the FAO's Intergovernmental Group on Grains, Abdolreza Abbassian, said. "It's very unlikely we will see a food crisis in 2010-11 but we can't exclude such a situation in 2011-12." ^[32]

JMR on Mar 3, 9:28 AM said: @ Nick : Funny you should mention that, because while we in the U.S. have lots of areable land per capita, we don't have much oil and our agricultural system is almost completely dependent on oil for production, transport, storage, packaging etc. So as oil prices rise due to suplly disruptions, increased demand, QE.X and God knows what else, expect your food prices to go up to. ^[37] A World Bank report published in July 2008 concluded that, among the competing influences of speculative investment, a weak dollar and rising oil prices during the food price spike of 2007-08, "the most important factor was the large increase in biofuels production in the U.S. and the EU." ^[36]

Oil prices can drive up food prices by raising the cost of transportation and production for farmers and food processors. ^[24] Oil prices affect food markets in many ways, from production to transport costs. When oil prices are high, there is more incentive to produce alternative fuels, such as ethanol, made from crops such as corn. ^[25]

Dairy prices were up 4 percent from February, meat prices were up 2 percent and the costs of oils and other fats climbed as well. While the FAO estimates that 2010 world cereal production came in 8 million tons better than it anticipated in December -- if still lower than in 2009 -- the agency has raised its forecast for 2010-2011 cereal consumption by 18 million tons. In the U.S., the Federal Reserve on Wednesday reported that its business contacts around the country are starting to pass on the rising costs of food and other commodities to their customers -- just the latest sign that inflation here could take off. Fed Chairman Ben Bernanke told Congress this week that, at least for now, the Fed expects the weak job market and high unemployment -- which keep wages low -- to keep prices from rising too quickly. ^[7]

Abdolreza Abbassian, FAO economist, said in the report that prices are unlikely to drop at least until it is seen how the newest crops are faring. He added that further increases in the price of oil could hit grain markets hard. Those markets are already reeling under a 60% increase in U.S. benchmark wheat prices so far this year. Abbassian said in the report, "Until we know about new crops, that means waiting at least until April, our view is don't expect any major corrections in these high prices; expect even more volatility now that oil has joined the crowd." Oil hits the food market on both ends ; farmers need oil to run their agricultural equipment, and shippers are big oil consumers in conveying goods to market. ^[20] In the second half last year and the first few months of 2011, international food prices have climbed again, and are now even higher than the levels seen during the crisis in 2008. In the words of Alan Bojanic, Regional Representative for Latin America and the Caribbean of the United Nations Food and Agriculture Organisation (FAO), "Ongoing food price volatility will remain a major source of uncertainty for agricultural producers, and it is thus vital to create tools to regulate this and promote agricultural development in the region". ^[38] World food prices rose over two percent during February to reach record levels according to the United Nations. It warns volatility in oil markets may push prices even higher. ^[39] The United Nations said on Thursday that world food prices rose 2.2 percent in February from the previous month to a record high, warning that food prices could increase even more with the volatility in oil markets. ^[26] LONDONWorld food prices rose 2.2% in February from the previous month to a record peak, the United Nations' food body said Thursday, as it warned that volatility in oil markets could push prices even higher. ^[2]

LONDON (MNI) - The global food prices index rose to an all time high of 236 in February, up from the 230.7 hit in January, according to the latest United Nations Food and Agriculture Organisation data. ^[40] Global food prices have hit record highs, and could rise even further, according to the United Nations. ^[19] Food prices are likely to carry on climbing all year in Britain, as figures indicated that global food prices had hit a new record high. ^[34]

The price increases have been driven by cereals, meat and dairy products. After rising for eight months, global prices of corn, wheat and soybeans are near record levels set in 2008, when riots erupted in countries such as Haiti and U.S. food prices jumped. ^[8] The UN agency warns food prices could spike even higher because of the unrest in the Middle East and North Africa. Food prices are at their highest levels since the FAO began monitoring prices two decades ago.'' The agency's senior grain economist, Abdolreza Abbassian, says except for sugar, the price of basic food commodities such as wheat, meat and dairy products has risen steadily since June. ^[17]

In 2008, grain giant Cargill saw profits rise by 86 per cent - again largely due to commodity trading. Australia: Droughts have been followed by catastrophic floods in some of Australia's most important agricultural areas, such as Queensland and New South Wales. Farmers have suffered disproportionally, meaning that both local food prices and the cost of wheat and meat globally have risen sharply. ^[11] The report said commodity inflation would justify a 3 to 3.5 per cent rise in processed food prices, but UK supermarkets have lifted prices by 6 to 6.5 per cent. ^[41]

The commodity price of key foods rose again in February, making it the eighth successive month of increases, according to the UN Food & Agriculture Organisation. It pointed out that the export prices of wheat, corn and rice are up by a staggering 70 per cent in one year. ^[41] The United Nations Food and Agriculture Organization (UN FAO) said that turmoil in north Africa and the Middle East was behind the fresh spike in the price of wheat and cooking oil, with many governments hoarding food. ^[34] Numerous causes, including climate change, behind record food prices (02/07/2011) Food prices hit a record high in January according to the UN's Food and Agriculture Organization (FAO), threatening the world's poor. ^[28] Food prices in February hit a new record, breaking the previous one set in January and continuing an eight-month streak of rising prices, according to the Food and Agriculture Organization (FAO). ^[28]

ROME: World food prices hit record highs in February, after rising for an eighth consecutive month, the UN Food and Agriculture Organisation (FAO) in Rome said on Thursday. ^[42] BEIJING,''March 4''(Xinhuanet) -- Food prices hit record highs in February according to new figures from the UN's food watchdog. ^[35]

Food prices hit new record - Telegraph We no longer check to see whether Telegraph.co.uk displays properly in Internet Explorer version 6 or earlier. ^[34]

The USDA estimates global food prices rose 25 percent last year and set a record last month. ^[12] The World Bank's Global Food Price Index jumped 15% between October 2010 and the end of January. Over the last year, global food prices have increased by 29% partially due to weather shocks such as the Russian drought and floods in China. ^[43] In China, for example, the consumer price index rose 4.9% in January from a year earlier. That's a pretty high inflation rate by itself, but it was especially disturbing to hear that food prices have jumped by 10.3% in the last year. ^[43]

The UN Food and Agriculture Organization says that the food price index rose 2.2% last month for the 8th month in a row. ^[14] Worldwide food prices increased 2.2% in February from January and have advanced for eight straight months, according to the U.N.'s Food and Agriculture Organization opnbrktFAOclsbrkt. ^[13] The rise in prices of Brent crude by some 13% over the last two weeks, with New York crude jumping 18%, had come at an inopportune moment from crop production terms, as North Hemisphere growers are planning sowing campaigns, the UN's Food and Agriculture Organization said. "This adds even more uncertainty concerning the price outlook, just as plantings for crops in some of the major growing regions are about to start," said David Hallam, director of the FAO's trade and market division. ^[44] The document, '''Price volatility in agricultural markets (2000-2010): Implications for Latin America and policy options,''' produced by the Economic Commission for Latin America and the Caribbean (ECLAC), the UN Food and Agriculture Organization (FAO) and the Inter-American Institute for Cooperation on Agriculture (IICA), describes a current scenario in Latin America of wild and unpredictable changes in the prices of agricultural raw materials. ^[29]

SANTIAGO DE CHILE, March 3 (BERNAMA-NNN-MERCOPRESS) -- Food price volatility has increased in recent months and will remain high for the time being. This is according to a joint bulletin launched today by several regional organisations like the Economic Commission for Latin America and the Caribbean (ECLAC), Food and Agriculture Association (FAO) and Inter-American Institute for Cooperation on Agriculture (IICA). ^[38] Rise in food prices by FAO were classified on the type of cereal, vegetable oil, milk, meat and sugar was the sixth time in a row since August 2010. ^[23] Based on the FAO notes, the highest food price increases occurred in ptoduk cereal and milk respectively by 3.7 and four percent. This situation illustrates the strong international demand for the commodity. ^[23] "The best forecasting models for the long run, for the next few decades," von Braun says, "are that we may have to face 50 percent increases in grain prices by 2030 and further increases, up to doubling trend prices, by the middle of the century." If current trends are any indication, these trends are likely to bring plenty of political instability in their wake. Experts note that rising food prices in countries like Egypt, where the average citizen spends some 40 percent of his or her annual income on food, have been a major factor in the political turmoil rocking the Middle East. ^[45] At the start of 2011 the food industry is in crisis. World food prices have risen above the peak they reached in early 2008. That was a time when hundreds of millions of people fell into poverty, food riots were shaking governments in dozens of developing countries, exporters were banning grain sales abroad and "land grabs" carried out by rich grain-importing nations in poor agricultural ones were raising awkward questions about how best to help the poor. This time, too, there have been export bans, food riots, panic buying and emergency price controls, just as in 2007-08. ^[46] Export prices of major grains are up at least 70% from February of last year and may continue to rise with only rice staving off a repeat of 2008's food price crisis. ^[16]

Corn is also used to feed the cattle, pigs and chickens that fill the meat aisle. Seiver said the rise in food prices should generate a larger supply of crops this year. "And then prices should come back down next year," he explained. ^[12] As an initial point, it'''s worth stressing that the crux of the food price challenge is about price volatility, rather than high prices per se. It is the rapid and unpredictable changes in food prices that wreak havoc on markets, politics and social stability, rather than long-term structural trends in food prices that we can prepare for and adjust to. It is also worth noting that volatility cuts both ways'''prices go up and down. The only reason food prices are going up so much this year is because they came down so fast after reaching 2008 peaks. Both rapid increases and rapid declines in food prices can create problems. ^[47]

Farmers have responded to the 2007-08 food price increases with record investment in agriculture in Russia, China, and India, leading to greater long-term food production. ^[48] Global food prices broke another record in February: higher than January, December and the so-called food crisis of 2008. At this point it's hard not to see food as a key factor in the Arab revolts. ^[37] Academics and policy makers have reached consensus on the effects that government policies had on food prices during the 2007-08 crisis. These lessons can help contain current food price increases. Export Restrictions : IFPRI concluded in their report Reflections on the Global Food Crisis that "three-quarters of the increase in the price of rice occurred in 2008--almost certainly because of adverse policy responses, such as export bans, from some major exporters." ^[48]

Food exporters like Russia have resorted to export restrictions when food prices rise, reducing supply on international markets. That drives up prices still further. Many government interventions are designed to shelter local markets against volatility in the global price of food, but in fact it is precisely these national interventions that are spurring global volatility. ^[47] "Global food prices are now at dangerous levels and it is also clear that recent food-price rises are causing pain and suffering for poor people around the globe." ^[45] "Global food prices are rising to dangerous levels and threaten tens of millions of poor people around the world," said World Bank President Robert Zoellick. ^[43]

ROME, March 3 (Xinhua) -- Global food prices increased for the eighth consecutive month in February, the Food and Agriculture Organization said Thursday. ^[27] The recent run-up in oil prices threatens to make the situation even worse, the Food and Agriculture Organization warned. This time it's Chrysler recalling almost 250,000 model year 2010 minivans and crossover SUVs because of a problem that can lead to sudden engine-stalling. ^[18] The Food and Agriculture Organization says the surge in oil prices caused by unrest in the Middle East would affect cereal markets. ^[35]

"Unexpected oil price spikes could further exacerbate an already precarious situation in food markets," said David Hallam, director of the FAO's Trade and Market Division. "This adds even more uncertainty concerning the price outlook just as plantings for crops in some of the major growing regions are about to start." Last month, United Nations experts called for greater investment in agriculture from both governments and the private sector. They said that the underinvestment in farming -- combined with weather-related disasters like droughts, floods and fires and political instability that disrupts supply chains -- was challenging the world's food security. ^[7] FAO officials say the world can expect further price rises if oil prices continue climbing. "Unexpected oil price spikes could further exacerbate an already precarious situation in food markets," FAO's director of trade and markets, David Hallam, said in his agency's report. "This adds even more uncertainty concerning the price outlook just as plantings for crops in some of the major growing regions are about to start." ^[22]

One crucial link is through biofuels. Abdolreza Abbassian, FAO Senior Grains Economist, said, "One of the strong linkages between the food and the energy sector is through biofuels, so when the oil prices are very high, there is definitively more incentive to produce more biofuels and that means using more food crops to produce them. This is what happened in 2007 and 2008, which was one of the factors that led to the sharp increase in prices of some of the food crops. So far has not been, has been very neutral in the 2010-11, but obviously the longer these prices remain high, the more we have to think that it could have a spillover effect into the grain sector, especially in the coming weeks and months." ^[35]

The FAO Intergovernmental Group on Grains also said that the rise in Brent oil prices to above $120 a barrel could also create a similar mix of factors that three years ago pushed grain prices to record highs. The international export prices of major grains are already more than 70 percent higher than this time last year. ^[26] International export prices for wheat and other grains last month were up 70 percent from a year earlier. In February alone, the cereal price index, measuring such food staples as wheat, rice and maize, rose by 3.7 percent. ^[7]

Cocoa has risen from $2,800 a tonne to more than $3,600 in the last two months alone. The FAO measures food prices from an index made up of a basket of key commodities such as wheat, milk, oil and sugar, and is widely watched by economists and politicians around the world as the first indicator of whether prices will end up higher on shop shelves. ^[34] The index averaged 90 when FAO first began tracking world food prices in 1990. ^[22]

The index, which has risen every month since June, is now at 236 points, the highest level since the UN began tracking food prices over two decades ago. ^[32] The FAO's Food Index Price averaged 236 points last month up 2.2% from January and the highest recorded in the Food Index Price's 21 years. ^[28]

Prices for major crops climbed Thursday as a U.N. agency said food costs are now at their highest point since the agency began tracking them 20 years ago. ^[24] In Pakistan, for example, government-subsidized food, sold in so-called utility stores, usually sells out as soon as it arrives. In the oil-rich Caucasus republic of Azerbaijan, high prices have been sending citizens across the border into neighboring Georgia, where they are buying up meat, potatoes, onions, and apples. Nadeem Ilahi, head of an International Monetary Fund (IMF) delegation visiting Baku this week, warned that Azerbaijanis should expect overall prices to rise 10 percent in the course of this year -- most of it due to the worldwide rise in the cost of food. ^[45] The cost of grain represents only a small portion of the prices U.S. consumers pay for food products. U.S. prices are expected to creep up later this year for items ranging from poultry to soda to wheat bread. ^[24]

The FAO said it expected world cereal production to have declined overall last year. It is also forecasting higher demand for agricultural products for food, animal feed and fuel production. These conflicting pressures could push prices higher. ^[19] Argentina: Floods have hit Argentinian farmers hard, cutting wheat production. China/India: as their populations rise, increasing demand for a variety of food products, from staples such as rice, to meat and even luxuries like wine are helping to drive up global prices. ^[11] By 2050, the UN estimates that global population could hit 9.1bn, which is bound to have a catastrophic effect on food prices because demand will be higher than ever before. ^[11] UNITED NATIONS -- Food prices are continuing their global surge, raising the specter of unrest in developing nations. ^[22] World food prices reached record high levels last month, according to United Nations data presented in Rome, the Economic Times reports. ^[49]

During the last record run-up in world food prices, FAO hosted a series of conferences aimed at encouraging governments to support agricultural development in poor countries, but there has been little follow-up. ^[22] Nick on Mar 3, 8:23 AM said: Many Arab countries have a high birth rate, and they don't have much agricultural land relative to their populations. Which makes them more dependent on imported foods than most other countries are dependent. It's no coincidence that higher international food prices lead to revolts in these countries first. ^[37]

The February prices unfortunately rose even further, so whether you calculate it on real basis, inflation corrected, or nominal, the food prices, which are a measure of international prices for basic food commodities, have reach a new high, yes," Abbassian said. ^[17] According to theUnited Nations, the food price index, which measures prices for a basket of food commodities, rose 2.2% last month. ^[18] The index highlights how food prices, which throughout most of the last two decades have been stable, have taken off in alarming fashion in the last three years. ^[34]

In areas devastated by last year's flooding, Pakistani politicians have been handing out packets of seed along with campaign literature. In the Persian Gulf, both Kuwait and Bahrain have promised their citizens generous subsidies to compensate for the rise in food prices -- though that doesn't seem to be stemming the political turbulence in the latter country. ^[45] Until that happens, Abbassian warns food prices will continue to rise.'' "Obviously the longer these (oil) prices remain high, the more we have to think that it could have a spillover effect into the grain sector especially in the coming weeks and months," Abbassian said. ^[17] What can be done? First and foremost, break the link between food prices and oil prices. ^[47] The current global food system worked well in a world of cheap, stable energy prices which allowed food to be grown in concentrated locations and transported over huge distances to meet demands. That system will continue to give us volatility as long as oil prices remain volatile. ^[47] Economist Ian Lee says oil prices, increasing demand for bio-fuels and lousy weather down south are to blame. He predicts the higher prices will feed a crisis in developing countries and will also hit Europeans hard. He says Canadians spend less of their household budget on food and people living here will likely be able to handle the blow. ^[15] Today, we have many shocks: supply shocks in important food producing countries due to extreme weather (droughts in Russia and China, floods in Australia and South Africa) and due to the higher cost of inputs (fertilizer, pesticides and transport over long distances) linked to oil prices. ^[47]

I would not bet on a return to cheap, stable oil prices in the near term, so the answer must be to change the food system to adapt to the new economics of energy. That probably means more localized and more diversified production and consumption, less use of fertilizer, and less wastage (20 percent of all food gets spoiled in storage and transport today). Ironically, the organic, slow-food, go-local cooperative movement may find that market forces are their new best friend. ^[47] Agrinews analyst James Dusterville said that with oil prices rising, refining margins will still be attractive even with corn prices already up more than 80% on year. "We've seen in the past, oil and soft commodities have gone hand in hand," he said. '''The difference this time is that before the oil price hike we'd already had the food hike.''' ^[36] The FAO's David Hallam said: 'Unexpected oil price spikes could further exacerbate an already precarious situation in food markets. ^[41] Further "spikes" in oil prices "could further exacerbate an already precarious situation in food markets", Mr Hallam added. ^[44]

"One of the strong linkages between the food and the energy sector is through biofuels, so when the oil prices are very high, there is definitively more incentive to produce more biofuels and that means using more food crops to produce them," said Abbassian. The international aid group Oxfam says millions of people around the world are sliding into poverty as they struggle to pay for basic foods.'' ^[17] Rising oil prices could be the crucial missing element in the recipe for a world food crisis next season. ^[36]

Possible consequences of price volatility include economic efficiency losses, reduced food security and rising under nutrition, as well as negative effects on the trade balance, according to the bulletin from ECLAC, FAO and IICA. Instability also involves high risk for producers, especially small-scale farmers, as there is increased uncertainty over their expected income. Nor should we rule out the possibility that volatility may lead to social unrest, as was the case during the 2007-2008 food crisis. Although the bulletin states that there are no universal solutions to tackling this situation, it does highlight the benefits of increasing food production in countries, mainly by supporting small-scale producers, sources said. ^[38] Abbassian says a major difference between the current situation and the food crisis of 2008 is that the price of rice, a staple for half the world'''s population, has risen less than four percent since last year. ^[17]

The various border protections against the global market in place around the world segregate the world food market into a number of much smaller national markets, the exact opposite of what is needed today. If these distortions didn'''t exist'''in other words, if there was truly a single global market for food, and an actual '''world''' price of food'''the volatility of prices would be much lower than the volatility in each of the protected local markets for food that we currently have. The difficulty, of course, is that there is little incentive for any single country to liberalize its agricultural trade so long as the distortions of other countries'''and the volatility in global markets they encourage'''remain. This brings us directly to the failure to complete the Doha Development Round of trade talks, which is now in its 10 th year of negotiations and has been stuck largely because of the impasse on agriculture. ^[47] There has also been flooding in southwest Asia, more droughts in Russia, bad weather in Argentina, droughts in Brazil and a poor harvest in Canada and the United States. Whether these countries are net exporters or importers of food doesn't really matter; their own populations and the wider world depend on what they grow, and if say Russia cannot feed itself, it is forced to import food from elsewhere, driving up prices for everyone. As to the cause of the floods, many blame climate change, but most meteorologists have pointed to a particularly strong La Nina anomaly this year a cyclical pattern of altered currents and winds over the Pacific that can have global effects. It is important to realise that the price of food, like that of any commodity, may have as much to do with the behaviour of the markets and traders as anything else. ^[11] Soaring oil prices will have a direct impact on fuel prices at the pumps, which are already at the record average level of 130p a litre. Government analysts have suggested that prices could double from $80 a barrel last year to $160 this year and stay there for a prolonged period. Such a spike would be on a par with the oil price shock of the 1970s that caused so global havoc. It could wipe '45billion off the value of the UK economy over the next two years, according to Mr Huhne. Mr Huhne is an advocate of greener forms of energy and used his warning over rising oil prices to justify a switch to renewable sources such as windfarms. He said that sustained oil prices above $100-a-barrel will transform the economics of renewable energy. ^[41] Oil prices recently hit 2-1/2 year highs, nearing records set in 2008, with markets spooked on concern that North African and Middle East unrest would choke key supplies. ^[5] Oil prices recently hit two-and-a-half year highs due to political unrest in North Africa and the Middle East. ^[19] Oil prices hit two-and-a-half year highs last month as escalating unrest in the Middle East and North Africa sparked fears of a slow-down in world supplies. ^[36]

Tom Hind at the National Farmers Union said it was likely that food prices were likely to continue climbing all year, after many shoppers have already been hit with jumps in the price of eggs, orange juice, chocolate and other key food items. ^[34] Food prices are shooting up to levels last seen back in 2008, when foodstuff inflation hit populations around the world. ^[45] If you're waiting for a reprieve of rising food prices at the grocery store, you could be waiting awhile. Food prices surged to their highest level ever last month, taking agriculture exchange traded funds opnbrktETFsclsbrkt higher along with them. ^[50] Rising 3.4% since December, the FAO stated that prices reached the highest point since the agency began tracking food prices in 1990. ^[28]

With global food prices rising to a record, Myanmar has halted rice exports to try to keep local prices in check. ^[2] Rising food prices are a growing global concern, partly fuelling the protests which toppled the rulers of Tunisia and Egypt in January and February, which in turn unleashed unrest in North Africa and the Middle East from Algeria to Yemen. ^[30] Rising food prices are a fast-growing global concern and were among the causes of the recent protests in North Africa and the Middle East. ^[35]

"If you look at the composition of consumer prices in Peru, half are food prices, which leaves it far more exposed to rising global commodities prices than anywhere else in the region." ^[51] Global skyrocketing food prices have been among the triggers for protests in Egypt, Tunisia and elsewhere, and raised fears of a repeat of the food price crises in 2007 and 2008. ^[12] As we analyze and address rising global food prices, it is important that governments and policy makers incorporate the important lessons from 2007-2008. ^[48]

If that were not bad enough, as the Mail reported yesterday, food prices in British supermarkets are rising much faster than in other leading nations as retailers cash in with heavy mark-ups which mean that stores have increased prices over the past few months by as much as 6.5 per cent. ^[11] Pasta is also up and the cost of some vegetables is nearly doubling. Next month, food producer Weston, the parent company of Canada's largest grocery chain, including Loblaws, will increase prices on their shelves five per cent. ^[15] Higher fuel costs hit food producers, pushing up the prices paid by consumers. That would add to inflationary pressure and increase the prospect of interest rate rises. ^[41] The rise in the price of oil affects more than just what it costs you to fill up your gas tank each week. It effects everything, even the cost of your food. ^[26] Britain's Chief Scientist, Professor John Beddington, has warned of a 'perfect storm' looming on the horizon, a global calamity driven by spiralling energy prices, oil shortages, a shortage of fresh water and rocketing food costs. ^[11]

Gary Sharkey of Hovis said: 'Bakers cannot possibly absorb the latest round of increases. Global commodity prices are running at their highest level since 2008, when food riots rocked many poor states. A report by investment bank UBS earlier this week said UK supermarkets and manufacturers had taken advantage of the global situation to push up prices by more than was justified. ^[41] The index, which measures the cost of a basket of basic food supplies -- sugar, cereals, dairy, oils and fats, and meat - jumped 3.4%, the seventh monthly increase in a row. It's now at its highest level since records began in 1990. ^[31] The index, which measures monthly price changes for a food basket composed of cereals, oilseeds, dairy, meat and sugar, averaged 236 points in February, the record in real and nominal terms, up 2.2 percent from January's record and rising for the eighth month in a row. ^[21] The index, which measures monthly price changes in a basket of food commodities, including cereals, oilseeds, dairy products, meat and sugar, has now risen for eight consecutive months. ^[4]

The Food and Agriculture Organization price index rose 2.2%. It was the eight straight jump since June and the highest since record-keeping began in 1990, says Caroline Henshaw for The Wall Street Journal. ^[50] A new record was set by the UN'''s Food and Agriculture Organization'''s (FAO) food index in February, which has increased consecutively for the last 8 months to its highest value since the index 1990, when the FAO started monitoring prices.'' ^[3] The Food and Agriculture Organization's index rose 2.2% in Feb. to the highest since records began in Jan ^[52] The Food and Agriculture Organization's index rose to a record high in February'''its eighth consecutive month of increases'''which will cement worries over food-price inflation. ^[36]

The Food and Agriculture price index rose for the eighth time since June to an average 236 points in February. ^[39] The FAO's cereal price index that includes things like rice, wheat and corn rose by 3.7 percent to 254 points. ^[26] International cereal prices have increased sharply, with export prices of major grains up at least 70 per cent from February 2010. The FAO Dairy Price Index averaged 230 points in February, up 4 per cent from January, but well below its peak in November 2007. The FAO Oils/Fats Price Index also remained just below its peak in June 2008, rising marginally to 279 points in February. ^[1] The FAO Meat Price Index, meanwhile, was up 2 per cent from January, averaging 169 points. ^[1] By contrast, the FAO Sugar Price Index averaged 418 points in February, slightly below the previous month - but still 16 per cent higher than February 2010. ^[1]

The FAO's price index for oils and fats rose marginally to 279 points in February, just below the peak recorded in June 2008. ^[2]

The "surge" in oil markets "adds to concerns over high food prices", the FAO said, as it revealed that the prices had risen for an eighth successive month in February to a new all-time high. ^[44] News of fresh spikes in food prices also comes on the heels of crude oil reaching $100 a barrel. ^[22] Plus, the PBOC has raised key interest rates three times in the last four months. Rising food prices are a big problem, but supply shortages are an even bigger concern in countries, such as China, that consume more food than they produce. ^[43] Today, it is the lack of affordability of food for the poor. In some sub-Saharan African countries, the poor might spend 70 percent of their income on food. If food prices double, these households literally become faced with the prospect of starvation. ^[47] The ongoing failure of the Doha Round shows that the political will to take collective action to reduce food price volatility is lacking; there is no trust that the market will deliver access to food better than a government. Politicians in developing countries care more about volatile food prices than those in developed countries because their citizens are more directly affected by the ups-and-downs of food prices. ^[47] This separation into markets, politics and social stability is actually a useful frame for understanding how food prices affect developing countries and what needs to be done at a policy level. ^[47]

Rise in food prices continued to strengthen has prompted calls for international aid agencies to take immediate action to end the price volatility. ^[23] International aid agencies have called on the international community to take urgent action to put an end to recent food price volatility. ^[42]

Food price volatility starts with the characteristics of food markets. What makes food markets distinctive is that both supply and demand curves are highly inelastic, meaning neither responds much to price changes in the short run. ^[47] Increasing demand for alternative fuels made from crops drives up food prices. ^[25]

Higher food prices have pushed an estimated 44 million people into extreme poverty. Economists think the problem could worsen as governments curtail grain exports to increase their own stockpiles. ^[24] Panic Buying, Stock Building and Lack of Transparency : Some countries made larger-than-usual purchases of basic grains, thereby increasing stocks, without realizing that sufficient international supplies were available. These practices fueled the price increases they were supposed to mitigate. In some cases, those increased stocks resulted in massive losses and food waste. ^[48] The International Food Policy Research Institute (IFPRI) reports that from January 2004 to May 2008, rice prices increased 224 percent, wheat prices increased 108 percent, and corn was up 89 percent. This price spike contributed to food insecurity worldwide, civil unrest in several nations, and generated appeals for food aid from 36 countries. ^[48] Consumer price inflation stood at 0.38 percent in February, in line with forecasts and just below a more than two-year high of 0.39 percent in January, Tuesday's official data showed. Peru's central bank has raised its benchmark interest rate twice this year to 3.5 percent to keep inflationary expectations under control in an environment of rising international food and energy prices. ^[51]

Food prices rose 0.98 percent in February, according to Peru's statistics agency. ^[51] The advent of a high-consuming middle class in the giant emerging economies of China and India is also having a dramatic effect on food prices. A generation ago, nearly all Chinese subsisted on rice and vegetables; now they want meat, and in increasing quantities. ^[11] According to a joint bulletin released yesterday by three social development agencies, food price volatility has increased in recent months and will remain high for the time being. ^[29] Some blame the hedge fund speculators who have funneled large amounts of money into futures contracts in food markets. They argue that market mechanisms are broken and need fixing. Others blame their governments (look at the riots in the streets of several developing countries) and find fault in the political systems, corruption and cronyism that have robbed them of the resources to afford higher food prices. Their solutions are political. Still others look to pervasive poverty and high income inequality as the reason why food price volatility is of such concern. They focus on the social aspects and solutions. ^[47] A recent report by the British Retail Consortium shows the rocketing rise in food prices a rise that is likely to continue, unabated, into the foreseeable future. ^[11] In the case of food prices, the recent short-term trend has been upwards, for a number of often unrelated factors. It is vital to realise that although recent rises may turn out to be something of a blip, the long-term prospects for cheap food are dire. ^[11]

Experts fear that rising food prices could lead to another food crisis similar to that of 2007-2008. ^[28] "But in the long run, unless we find ways to feed 9 billion people by the year 2050, food prices will be significantly higher." The Associated Press contributed to the information in this report. ^[12] San Diego consumers have enjoyed relatively stable food prices over the past two years. ^[12]

Governments like to make sure that rural farmers get '''fair''' prices (usually meaning large public subsidies), while urban constituents get subsidized food to consume. The balance between these constituencies varies from country to country, but the large-scale presence of government intervention in food markets is common across the world. The trouble is that when food prices are volatile, government intervention becomes unpredictable in terms of its budgetary cost. ^[47] The record food prices that triggered regime change in Tunisia and Egypt and may yet do so in Libya have also enriched commodity traders. The traders have seen the value of their food-related investments triple in value, to $5.7 billion, in the three months to Dec. 31 over the previous quarter. ^[33] Skyrocketing food prices have been among the triggers for protests in Egypt, Tunisia and elsewhere, and raised fears of a repeat of the food-price crises in 2007 and 2008. Some experts point to key differences compared to those years: for one, the price of rice, a dominant component of regular diets in many parts of the world, is much lower today. ^[25] Photo: REUTERS Demonstrators shout slogans as they hold steel plates during a rally to protest food prices in New Delhi February 23, 2011. ^[17] An OECD study notes that safety nets "support the purchasing power of the poor without distorting domestic incentives to produce more food, and without reducing the incomes of poor food sellers." They mitigate the temporary impact of food price increases on the poor, without disrupting price signals for farmers. ^[48] Soaring food prices have helped to fuel protests in the Middle East and North Africa. ^[52] Some of the riots and revolutions seen in recent weeks in North Africa - particularly in Tunisia - were driven as much by rocketing food prices as political dissatisfaction. This storm will be driven by a mixture of worsening environmental conditions and the burgeoning population of the Earth. It is important to distinguish here between short and long-term trends, both of which can affect prices dramatically. ^[11] Economists also fear that food price hikes will reduce economic activity and squeeze household spending as families desperately cut back elsewhere. ^[41] LIMA, March 1 (Reuters) - Food prices stoked Peruvian inflation in February and raised expectations of further rate hikes in one of the world's fastest growing economies. ^[51] The inflation of food prices has already been blamed as a contributing factor to the growing unrest in the Arab world. ^[26]

The World Bank recently warned that high food prices have driven 44 million people around the world into poverty since June. ^[45] About 44 million people in emerging markets have fallen into poverty because of rising food prices, according to the World Bank. ^[43]

Because food prices are so inherently volatile, it is natural that speculators should enter futures markets in a big way. ^[47] Same content, food prices are up, but without invoking images of the rest of the human race, outside the fraudulent money bubble. ^[37] Tunisia/Egypt: Rising food prices have been blamed, at least in part, for popular uprisings that have seen the fall of the Tunisian and Egyptian regimes. ^[11] The solution: safety nets or social protection for the poor, to cushion the blow of rapid changes in food prices. ^[47] France, as the current chair of the G20 group of leading world economies, has vowed to take action to stem rising food prices. ^[42]

Now a new UN report says, the global price of food is skyrocketing. It's only logical. ^[14] Invest more in agriculture. There seemed to be an international consensus that this was indeed important; and a U.S.-led international fund to promote investments in agriculture was launched last year (the Global Agriculture and Food Security Program ), but faced with budget pressures few countries have made new pledges or lived up to their commitments. From a $20 billion headline goal, GAFSP is now struggling to find a few hundred million dollars to support its programs. ^[47] "We expect supply and global demand for cereals will be very tight and seek a new balance for 2010/2011 is," FAO said in a statement, quoted by Reuters on Thursday (03/03/2011). FAO states are faced with high demand and reduced cereal produkai in 2010, stocks plummeted this year due to limited predicted yields of wheat and rice. According to FAO, wheat production this year predicted would only rise three percent. ^[23] FAO said in a statement it expected a tightening of the global cereal supply and demand balance in 2010/11. "In the face of growing demand and a decline in world cereal production in 2010, global cereal stocks this year are expected to fall sharply because of a decline in inventories of wheat and coarse grains, " the agency said. ^[21]

FAO expects a tightening of the global cereal supply and demand balance in 2010/11. The global food agency has revised up its forecast for world cereal utilization in 2010/11 by 18 million tonnes since December, in response to larger use of maize for ethanol production in the U.S. and statistical adjustments to China's historical supply and demand balance for the grain. ^[4]

Though the United States' strong domestic agricultural production can protect Americans to some extent from the vagaries of global food markets, that same trend can be seen here as well, if not as painfully. Despite a historically tame level of U.S. inflation amid the weak job market, the Labor Department said that in the 12 months that ended in January, its food index rose 1.8 percent. ^[7] No wonder global demand for pork has risen so sharply. Then there is the rush to biofuels, especially in the U.S., where a desire to be free of oil-dependency has seen millions of acres of prime agricultural land being taken out of food production altogether and switched to growing crops such as maize which can be turned into petrol. It's just another piece in the global jigsaw which, as its diverse elements continue to multiply, suggests that the era of cheap food will probably never return. ^[11]

Hybrid seeds provide better yields and disease resistance but cannot be saved by farmers for the next planting, as the hybrid plant seeds do not reliably produce true copies, it added. According to FAO, the majority of poor smallholder farmers growing food security crops such as sorghum, millet and cassava rely on self or open-pollinated seeds or crops that are propagated through dividing bulbs, or taking cuttings stored from previous harvests and grafting them. They do not always have access to new varieties that can help them increase production using the same amount of inputs, it added. "It doesn't cost a lot comparatively to set up a seed enterprise, especially when it involves local farmers' organisations, but as case studies in the policy guide from three continents have shown, such enterprises can be highly effective in improving food output," said Shivaji Pandey, Director of FAO's Plant Production and Protection Division. ^[53]

The ascent of petroleum prices -- sparked by the turmoil gripping Libya and other countries in the oil-producing Middle East -- risks boosting transportation costs in ways that will make food even more expensive. ^[7] The bulletin "Price volatility in agricultural markets (2000-2010): implications for Latin America and policy options" "describes the current scenario: frequent, unpredictable and dramatic changes in the prices of agricultural raw materials, with the impact on countries varying in accordance with national conditions. For countries specialised in exports of food raw materials, for instance, a price rise offers significant opportunities to improve their terms of trade, while for other countries this may represent a risk to food security (especially for net food importers). ^[38] In countries that export food raw materials, price rises offer an opportunity to improve terms of trade, while the change may represent a significant threat to food security for net food importers. Other possible consequences include losses in economic efficiency and an increase in under-nutrition. ^[29]

FAO and other food market experts are starting to acknowledge that biofuel policies supporting the ethanol industry in the United States are a strong factor behind the rise of corn prices. ^[22] According to food industry experts, in a couple of years, if the prices of staple ingredients continue to rise, we could be looking at the '5 loaf of sliced bread, the '1 tin of beans and pasta moving from being a basic staple to a luxury item. ^[11]

There are differences between the periods, but the fact that agriculture has experienced two big price spikes in under four years suggests that something serious is rattling the world's food chain. ^[46]

Despite attempts by the authorities in Beijing in particular to control prices and food supply, the latest Chinese external trade numbers show that the value of imports of food, beverages and tobacco more than doubled (they rose by 111 per cent) between 2007 and 2010. ^[11] International cereal prices have increased sharply with export prices of major grains up at least 70 per cent from February last year," it added. ^[10] World cereal prices have advanced radically with export prices of major grains up at least 70 percent from February last year. ^[27]

The 3.7-percent rise for cereals "reflected further gains in international maize prices, driven by strong demand amid tightening supplies, while prices rose marginally in the case of wheat and fell slightly in the case of rice." Dairy prices meanwhile went up 4.0 percent from the previous month but were still below their peak of November 2007, the FAO said in a statement. ^[42] According to the World Bank, wheat prices have risen in the past six months by 54 percent in Kyrgyzstan, 45 percent in Bangladesh, and 33 percent in Mongolia. As usual, it is the poorest of the poor -- those who spend the largest proportions of their day-to-day incomes on food -- who are hit the hardest. ^[45] In China, a Communist regime fretful of events unfolding in Egypt is expected to impose food-price controls to prevent social unrest. '''The price hike is already pushing millions of people into poverty,''' says Robert Zoellick, president of the World Bank Group, '''and putting stress on the most vulnerable, who spend more than half of their income on food.''' ^[33]

Many important foods were up even more: grain up by 15%; sugar by 20%; eggs by 20%; cooking oil up 22%; and fresh fruit surged 34%. China has taken some aggressive steps to curb its inflation. It just raised the amount of money banks must keep in reserve. The People's Bank of China raised the reserve requirement ratio by 50 basis points to 19.5%, which is a record high and the second time this year it has boosted the reserve requirement. ^[43] The oil market rally prompted by Middle East unrest has worsened further prospects for world food security, the United Nations said, as it revealed that the cost of eating had reached a fresh record high. ^[44]

With the cost of groceries going up, the price of food at restaurants could also be on the rise. ^[15] As the Journal noted, it's' difficult to say how long the good mood will last, with input prices continually rising for major food companies, and lagging disposable income making it difficult for brands and grocers to pass along costs to consumers. ^[32]

Fuel is an important input for farmers, so rising oil prices will have a direct influence on production costs. ^[36] The rise of oil prices is having another odd effect - it is making the production of corn a more attractive thing. ^[26]

"Firm world demand continues to underpin prices" for dairy produce, it said. The general rise in prices has been blamed on rising oil prices, adverse weather conditions in key crop-growing countries such as China and Russia and increased speculation on financial commodity markets. ^[42] A UN report yesterday revealed that rises in bread, pasta, breakfast cereal, dairy and meat prices are on the horizon irrespective of future oil price hikes. ^[41] Higher prices of cereal, meat and dairy products drove the increase, FAO said, warning of further increases on the back of rising oil prices. ^[52]

The FAO is worred that with rising oil prices, it could encourage a larger corn crop at the expense of other crops. ^[26] Access thousands of business sources not available on the free web. "With oil prices rising, it could encourage a bigger corn crop at the expense of other crops," he said. ^[2] Sugar was the only commodity of the groups being monitored whose price hadn’t risen. When oil prices are high, there is more incentive to produce alternative fuels, such as ethanol, made from crops such as corn. ^[25]

Rabobank analyst Erin Fitzpatrick said rising oil prices and the reinstatement of biofuels subsidies in the U.S. is likely to put even more pressure on near record-low world corn stocks. "This definitely doesn't bode well for markets when we already have critically-low ending stocks," she said. ^[36]

The organization is urging the international community to curb oil price speculation and reverse the demand for biofuels. ^[17] If the Middle East crisis spirals out of control and leads to the closure of the Canal at any point, four million barrels of crude oil every day will have to go the long way round Africa - thus pushing up oil prices. ^[11] Along with surging oil prices, fueled by the crisis in North Africa and the Middle East (MENA), commodities have been fueling inflation around the emerging world, leading to overheating and social and political instability.'' ^[3]

Fears that higher oil prices and further social unrest could derail the global economic recovery have been augmented by the prospects of tightening in developed economies, as central bankers from Jean-Claude Trichet to Ben Bernanke have expressed fears that inflation could be a more serious threat than had been expected. ^[3]

Oil prices are currently running at over $100 a barrel the highest level since 2008. ^[41]

Much of the increase is from the rising price of oil, which neared $120 a barrel late last month -- as hundreds were killed in riots between forces loyal to Libyan leader Moammar Gadhafi and anti-government protesters. Other food commodities have surged in recent months, in part due to bad weather conditions. ^[13] Reducing Import Restrictions, Releasing Stocks and Reassuring the Markets : Importing countries that reduced tariffs and other taxes on key staples were able to lower domestic prices. Moves by governments to publicize information on food availability and their willingness to release stocks were the key measures that helped end the sharp hike in rice prices in 2007-2008. ^[48] Mechanized power to till the soil would do wonders to raise yields. Markets can only work if governments allow them to do so. In many countries, food markets are not allowed to operate freely precisely because they generate confusing price swings in the short term. ^[47] Export restrictions in producer countries were the primary cause of panic buying by major importers, pushing up world prices. Export restrictions also undermine long-term food security, as they disrupt price signals and dampen the supply response by local producers. ^[48] "So the price of meat goes up as the price of animal feed increases, and that's affected by the price of corn." Zaman also points out that export bans usually end up exacerbating shortages for all concerned -- even the countries that impose the bans to protect their own domestic markets. Countries that keep their wheat at home through export restrictions will still end up paying for the meat and other foodstuffs that they import. ^[45] Buyers from Asia must now tap other markets to meet demand, further driving up prices. Much of the growth in global nutrient use has come from developing countries in Asia and Latin America, as those regions' rising populations and income levels boost the demand for grains and meat, products that hadn't traditionally been part of their diets. ^[31] 'The current situation reflects a supply problem,' says Simon Ward, chief economist at Henderson Global Investors and an expert in commodity price movements. Put simply, a series of extreme weather events have conspired to drive up the prices of basic commodities such as wheat, maize, coffee and meat. ^[11]

"There is great concern over the obvious high volatility of basic commodity prices especially food and serious supply shortages of meat, vegetables, sugar, salt, and dairy products," Lipsky said. ^[43]

The price of corn affects most food products in the grocery store. It's the main ingredient for cereals and snack foods, and corn syrup is used to sweeten soda and many other food items. ^[12] The index -- a compilation of price data for sugar, cereals, oils, meat and dairy products -- has gradually risen every month for the past eight months. ^[22] The food index hit 236 points, gaining 2.2% from January and 34% from February a year ago. Gains were recorded for all commodity groups but one of those followed by the index, which include cereals, dairy, oil/fats, and meat on the gaining side and only sugar on the declining side. ^[3]

The index, which tracks monthly price changes for key staples, showed the greatest increases for dairy and cereals, especially corn. ^[49] The index, which monitors average monthly price changes for a variety of key staples, showed the sharpest increases were for dairy products and cereals. ^[42]

The increase was driven mostly by higher prices of cereals, meat and dairy products, FAO said. ^[25] Cereal and diary prices were each up about 4% in February while meat prices increased 2%. Overall prices are the highest since the FAO started keeping such records in 1990. ^[13]

The FAO said the volatility in the oil markets was adding to an already difficult and uncertain situation. "This adds even more uncertainty concerning the price outlook just as plantings for crops in some of the major growing regions are about to start," said the FAOs David Hallam. ^[19] IMF spokesperson Caroline Atkinson pointed to the "impact on the poorest and most vulnerable, particularly in the low-income countries, but not only there". The prices of cereals, such as wheat, rice and maize, have risen by 70% in the past year. This is largely due to droughts in eastern Europe and floods in Australia - both major crop producers. ^[19] Growth in wheat prices was tempered by "downward pressure later in the month following some improvements in weather in China, and reports of possible delays in purchases by some of the countries hit by the recent wave of political unrest", the FAO said. ^[44] The worst drought since the 1800s has hit one of China's major grain-growing regions, meaning the country has imported more grain, which again has helped to push up global prices. ^[11] China may have taken the U.S. manufacturing industry for shoes, clothes, electronics, furniture and clothes, but it cannot steal our agricultural industry, so the United States will remain a dominant global food player. ^[43]

There are several ways you can profit from the rising demand and prices of foods. Last week, I wrote about three fertilizer companies, and my good friend Larry Edelson wrote about two U.S. food producers in his February 7 column to consider. ^[43] The historic geopolitical turmoil in North Africa and the Middle East, driven in large degree by chronic food shortages and spiralling prices, began with the grassroots ouster of Tunisian dictator Zine el Abidine Ben Ali in January. ^[33] The Middle East and North Africa, where civil protests are centred, encompass some the world's biggest wheat importers, including top-ranked Egypt, where Hosni Mubarak was ousted as president last month. The weakest sector was sugar, where prices eased marginally during the month, although the FAO stressed they remained "high and volatile, mostly driven by tight supplies in major exporting countries". ^[44]

Wheat prices, on the other hand, are up 60 percent, while corn, a major ingredient for biofuels, has risen 93 percent since last year. ^[17] Worldwide, poor or non-existent harvests have driven world corn prices up 87 per cent over the past year. ^[33] In 2007, prices of wheat rose by 80 per cent, maize per cent and rice a astounding 320 per cent driven, at least in part, by speculators playing the markets rather than genuine shortages or increased demand. ^[11] FAO expects winter crops in the Northern Hemisphere to be generally favourable and forecast the global wheat production to increase by around three per cent in 2011. ^[10] FAO said it forecasts global wheat production to increase by around 3 percent in 2011. ^[21]

The FAO predicts wheat production will rise by about 3% in 2011, broadly in line with other organizations, but Mr. Abbassian said a minimum increase of 3.5% is needed to ensure sufficient output. ^[2]

Cereal supplies globally are expected to tighten in 2011 due to low stock levels. The FAO raised its estimate for world cereal production in 2010, but also said that it expects to be outpaced by a significant increase in world consumption. ^[26]

The increase in cereal prices in February mostly reflect gains in international maize prices, driven by strong demand amid tightening supplies, the world's apex agriculture body, said. ^[10] Grain prices were also strong, up 3.7% month on month, reflecting "mostly further gains in international corn prices, driven by strong demand amid tightening supplies". ^[44] '''As much as a third of our corn crop is getting turned into ethanol, and that corn isn'''t available to feed animals or people or to be exported or anything else," said Dan Seiver, economist with the Finance Department at San Diego State University." That certainly has pushed corn prices, which is a key international grain prices, higher than they would otherwise be." ^[12] A recent report by the Organization of Economic Cooperation and Development, a forum of the world's developed countries, recommends that governments cut back on subsidies aimed at raising corn, sugar, and beets as biofuels. The problem, says World Bank economist Hassan Zaman, is that rising prices for crops like these have knock-on effects. "When it comes to other commodities these markets are very interlinked," Zaman says. ^[45]

According to the World Bank, up to 50 per cent of crop yield increases have come from improved seeds, while farmers' access to quality seeds is a key factor for better food and nutrition in poor countries. ^[53] The Food and Agricultural Organisation (FAO) has revealed that small seed enterprises are the best way of ensuring the availability and quality of non-hybrid seeds for food and feed crops in developing countries. ^[53] U.N. officials also want the United States to donate more food aid in the form of direct purchases from developing countries close to crisis points, rather than the current congressional mandate that almost all food aid be bought in the United States and shipped from there. ^[22]

The situation has prompted experts to warn of a global food crisis reminiscent of the spike in food costs that in 2008 caused various riots.'' ^[3] The food crisis is having many unexpected side effects. The president of Indonesia has been using his speeches to urge citizens to grow chili peppers in their backyards. Iraq's government has shelved plans to buy new fighter planes for its air force, opting instead to use the money to boost its stocks of grain. ^[45] The FAO says that while a food crisis this fiscal year might be dodged, it's not ruling anything out in 2011-12. ^[50] The FAO has recently warned of the risk of a repeat of the 2008 food crisis and has called for stronger regulation of commodities futures markets. ^[40]

PowerShares DB Agriculture (DBA) is more of a pure food commodity play as it invests in a basket of agricultural futures such as corn, soybeans, sugar, cattle, cocoa, coffee, cotton, lean hogs and wheat. Market Vectors Agribusiness (MOO) invests in agricultural commodity producers such as Deere & Company, Potash and Archer Daniels Midland. PowerShares Dynamic Food & Beverage (PBJ) invests in companies that distribute food to consumers such as Starbucks, Yum! Brands, General Mills, HJ Heinz and Kroger. Consumer Staples Select Sector SPDR (XLP) invests in companies such as Wal-Mart, Kraft Foods, Kellogg and Sara Lee. ^[43] The American Mid-West has suffered from George Bush's 2005 Energy Policy Act, which saw tens of thousands of acres of prime American agricultural land taken out of food production and turned over to the production of biofuels, mostly derived from corn. ^[11] The solutions lie in three areas'''improving food markets and agricultural production, building political will to integrate food markets across countries, and developing social safety nets in poor countries. ^[47]

Olam International Ltd, Wilmar International Ltd and Noble Group Ltd are most likely to lead the charge as the benefit from home grown markets in ASEAN, China and India, where the world's largest populations are consuming more and more of the world'''s food supply. Cash Flow is on the rise at Noble and Olam, both have successfully made the switch into production from trading, have been expanding ever since. ^[5] Supermarkets were making gains, helped by a 9.2% profit increase at Kroger ( KR ), a stock Barrons.com recommended in September. Large food makers, like Kraft ( KFT ) and Kellogg ( K ) were trading higher this afternoon, after Heinz ( HNZ ), also a Barrons.com bullish pick, reported a 20% rise in profit today. ^[32]

The guiding principle behind our work is that there must be a good reason for brokerage firms to spend billions of dollars a year on stock research. Obviously, these investment experts know something special that may be indicative of the future direction of stock prices. From day one, we were determined to unlock that secret knowledge and make it available to our clients to help them improve their investment results. ^[16] U.S. crude oil futures prices closed above the century mark for the first time in three years at the close of trading Tuesday. ^[22] Wheat prices have doubled in the past year, coal prices have surged and Brent crude oil is trading near a two-year high. ^[40]

Grain prices have also become increasingly linked to the movement of oil markets as more corn, particularly in the U.S., has been diverted for biofuels. ^[36] The escalating price of corn, used in everything from cooking oil to cattle feed, is pushing up prices across the board ''' for beef and poultry along with baked goods. ^[33]

If crude oil - a key cost for farmers and shipping companies moving commodities around the world - continues to climb prices will climb yet higher, the UN warned. ^[34] The UN body also warned that volatility in oil markets could push prices even higher. ^[16]

The body warned that the recent spike in oil prices could push prices up even further. ^[32] 'We now have the prospect of a fully-fledged energy and commodity price shock squeezing real wages and pushing up inflation,' said the Business Secretary. Chris Huhne, his Lib Dem colleague and Energy Secretary, said the political turmoil in the Arab world could send oil prices skywards. ^[41] A catastrophic 1970s-style oil price spike is on the cards while the price of supermarket basics continues to soar. ^[41] Abbassian says higher oil prices due to the continuing turmoil in Libya are making matters worse. ^[17]

The FAO price index increased 2.2% to an average 236 points, with all commodity groups posting gains expect for sugar. ^[16] The index, which measures monthly price changes in a basket of cereals, oilseeds, dairy meet and sugar prices has now risen for eight consecutive months. ^[40] CHINA: A senior Chinese investment official warned Friday of the many uncertainties facing the European economy, not least the threat posed by inflation. HONG KONG STOCKS: The Hang Seng Index is trading within a narrow range around its opening price, now up 1.33% at 23,429.82 after Wall Street's rally overnight. ^[40]

We are not talking luxuries here; bread, pasta and tinned vegetables have seen prices rise by 3 per cent in the first weeks of 2011, amounting to an annual inflation rate of more than six per cent. ^[11] Unrest: A former Libyan flag is held over a crowd of people opposed to the rule of Colonel Gaddafi. It found that British prices were rising at an annual rate of 4.9 per cent, compared with 3.6 per cent in Germany and 1.8 per cent across the euro zone. ^[41]

Food currently accounts for just 11 per cent of UK household spending, falling below what we spend on housing, leisure and transport. It is certainly not just supermarket pricing which is forcing us all to pay more. ^[11]

Food will also be more expensive to transport. Population: In November this year, the global population is forecast to pass the 7billion barrier having doubled since 1970. ^[11] ". global cereal stocks this year are expected to fall sharply because of a decline in inventories of wheat and coarse grains. ^[10] Wheat harvests in Ukraine, also plagued by torrid weather, dropped 15 percent last year. Both countries responded by introducing export bans that have exacerbated global shortages of the commodity. ^[45]

Many economists believe that the mere announcement that Japan would release 300,000 tons of rice to the Philippines reduced global rice prices. Long Term Attention to the Agricultural Sector : Countries are addressing underinvestment in their agricultural sectors with the help of donors and other partners, decreasing their vulnerability to extreme and sudden crises. ^[48] Helping drive up global prices was a cool, wet summer that delayed planting in the U.S. Midwest. The suffering from this crisis highlights again the gap between rich and poor. ^[33]

Ukraine is onto something in urging a new world grain bank '''to safeguard the global food supply.''' ^[33] In 2009 the G20, the summit of the world's biggest economies, created the Global Agriculture and Food Security Program, an ambitious attempt to help the world's most vulnerable populations. ^[45]

Shoppers can expect to pay 4 to 5 percent more for food in the coming months, according to Paul Lehman with the U.S. Department of Agriculture. ^[12] U.S. corn use for ethanol is projected at a record five billion bushels for the 2011-12 crop year, according to the U.S. Department of Agriculture. Biofuels production accounted for about 40% of corn demand in the world's biggest producer this season. ^[36] The U.S. Department of Agriculture predicts that by 2020 demand for soybeans in China will increase to 88.3 metric tons a year, up from 50.3 metric tons last year -- that's a 75% increase. ^[43]

The 2.2% increase from January was, for a second month, led by the dairy sector, where prices rose by 4%, boosted by "firm world demand". ^[44] Corn is used in almost everything McDonald'''s serves. With world corn prices soaring, McDonald'''s has posted its own price increases on everything from Big Macs to Chicken McNuggets. Other restaurant chains are expected to follow. ^[33] Corn prices continue to climb, rising by around 33 percent since December 2010. ^[22] Chicago corn prices spiked to highs not seen since July 2008 Tuesday of $7.27 1/4 a bushel on the March contract, sending ethanol futures to a 31-month high of $2.582 per gallon on the May contract. ^[36]

British bakers expect a standard loaf to cost 10p to 15p more within weeks. Higher grain prices also lead to more expensive meat and dairy products in the shops because of their heavy use in animal feed. ^[41] BOSTON ( TheStreet ) -- The agricultural products and services industry is going to do nothing but grow in coming years as a wealthier world drives up food costs. ^[31] Farmers depend on fuel to run agricultural machinery, while dry bulk shippers are heavy oil users, costs which are passed on to food buyers. ^[5] If oil continues to surge, Abbassian warned that biofuels could once again drive the cost of food upward, as it did in 2008. ^[20]

Charities around the world are also warning that the rising cost of staple foods could increase the number of chronically hungry people above one billion. "Millions more people are sliding into poverty as they struggle to afford basic food supplies and more and more are at risk of going hungry." ^[26] Families face massive rises in fuel and food costs, ministers warned last night. ^[41] The World Food Programme estimates that the cost of purchasing and shipping U.S. food to crises eats up roughly half the value of all U.S. food aid. ^[22]

In the past year, hundreds of billions of dollars have been pumped into the U.S. economy by the Federal Reserve in a programme of 'Quantitive Easing' (in other words, printing money). That includes food. ^[11] Yup, China passed Canada, who imported $16.9 billion of U.S. food in 2010, by buying $17.5 billion worth of agricultural goods. ^[43] Demand for food is skyrocketing as the middle class grows in countries like China and India. ^[45] Nations are now in the midst of negotiations on possible changes to the Food Aid Convention, a treaty that governs how countries distribute food aid. ^[22]

February's monthly high is 36 points higher than the average for all of 2008, when soaring prices sparked rioting and food-export bans in some developing nations. ^[22] For years, American grain prices had been set by the Minneapolis Grain Exchange. ^[11] Just a few years ago, the main social issue in India was farmer suicides because of low agricultural prices. ^[47] Wet weather combined with severe cold has hit the harvest badly in the past year, again pushing prices up dramatically. ^[11]

Chrysler dealers will replace ignition modules on the vehicles with new ones that the company says are less prone to accidental shutoff. Photo: She might not be smiling if cereal prices go higher. ^[18] Last month, wheat prices reached two-year highs because of a recent drought in China's winter wheat-producing region. ^[13] Extreme weather, ranging from droughts in Russia to floods in China and Australia, has particularly hit global wheat production. ^[41]

Some of the investment strategies include working to alleviate transportation, distribution, and supply-chain bottlenecks, promoting sound market-based principles for agricultural sector development and regional trade, encouraging private investment, and undertaking appropriate public investments and use of new agricultural technologies. Measures such as these are critical to improving productivity and meeting rising demand. Emergency Donor Assistance : It is important for vulnerable countries to know that if there is a crisis, the global community will respond. ^[48] Victor Villalobos, director general of IICA, says that "instability is a constant in the global scenario, and it is therefore important to generate information that enables our countries to plan and make the right decisions". "This is what we three agencies are trying to achieve jointly. To tackle this situation, it is crucial to innovate and invest more in agriculture," he adds. ^[54]

Eighty percent of that aid goes toward emergencies rather than malnutrition programs as was common in the past. The United Nations wants rich governments to focus more development aid dollars toward helping poor countries improve their own domestic agriculture sectors and markets. ^[22]

The only food to have dropped is sugar, which dipped last month to 418 points, which is slightly below the previous month but still 16 percent higher than February 2010. ^[26] In 2007-2008, the United States collaborated with multilateral organizations, non-governmental organizations, the private sector, and international partners to manage the crisis by providing billions of dollars in emergency financial assistance and food. ^[48] Food situation is a major issue which is going to affect the international economy and trade," said Finance Minister Pranab Mukherjee of India. ^[43]

In launching a task force of food security, Lee declared: '''There is an increasing likelihood of food crisis globally, due to climate change.''' ^[33]

Of all the commodities groups monitored by the FAO, which include cereals, dairy, meat and oils, only sugar dipped last month to 418 points, slightly below the previous month but still 16% higher than February 2010. ^[2] Cereals, meat and dairy products have seen the greatest increases, and the only commodity that has remained stable is sugar. Wheat is up 60% so far this year. ^[14] Given the complexity of world markets and agriculture, experts have pointed to a number of reasons behind the rise including rising meat and dairy consumption, the commodity boom, fresh water scarcity, soil erosion, biofuels, growing human population, and a warming world that has exacerbated extreme weather events like last year's heatwave in Russia. ^[28]

Besides raising farm fuel bills, oil costs also have a bearing on the costs of fertilizers and sprays, so posing a significant upward threat to growers' cost of production. ^[44]

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5. Food Prices Hit a Record High | Live Stock Trading News | Equities, Forex, Gold, Silver and Oil Trading
6. Stockpiling keeps pressure on food prices: FAO | Reuters
7. Mideast Turmoil Risks Fueling Record Global Food Inflation
8. U.N.: World food prices highest in 20 years » Standard-Times
9. The most important news and commentary to read right now. - The Slatest - Slate Magazine
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20. Oil Price Rise Will Hit Cereal Markets: UN | Advisor One
21. FAO food price index hits record high in February | Agricultural Commodities | Reuters
22. Food Prices Hit Record High, Spurring Worries About Global Unrest - NYTimes.com
23. World Food Price Index Continues Experiencing Increased | Business Area
24. UN: World Food Prices Highest in at Least 20 Years - ABC News
25. Food prices reach 20-year highs - KansasCity.com
26. Food Prices are on the Rise Globally; Reach Record High | Cleveland Leader
27. FAO sees food price increase after global oil price surge
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