Food prices at 15-month high

Posted by Isobel Drake on 14th January 2010

Sugar, dairy and oils were the catalysts for growth in global food prices last month, according to the latest release of the FAO Food Price Index, while cereals and meat prices remained stagnant. The Index now sits at a 15-month high.

The Index of a basket of food commodities (sugar, dairy, meat, cereals and oils and fats) reached 171.9 points last month, up 29 points year-on-year and 33 from the lowest point during the downturn (February).

“The main drivers were sugar, oilseeds and dairy which continued to rise in December,” Abdolreza Abbassian, economist at the UN Food and Agriculture Organisation, told Reuters. “But we are still 19-20 per cent below the peak of June 2008”.

The sugar price surged to a record of 334 points in December, while oils and dairy were the other big movers – up seven and eight points, respectively. These catalysts were also the drivers of growth for the calendar year, with meat and cereals prices still hovering at the levels seen at the beginning of 2009.