The United Nations Food and Agriculture Organization last week indicated its monthly world food price index in December 2010 set a new record at 214.7. The previous monthly food price index record was 213.5 in June 2008.
The monthly food price index climbed steadily from a recent low of 162.6 in June 2010 and was 25% higher than the December 2009 price index of 172.4. and 50% higher than the December 2008 index of 143.3.
The monthly cereals price index (compiled from grain and rice price indices) in December 2010 was 237.6, the highest since 239.5 in August 2008 and compared with the record 274.3 in April 2008. The monthly edible oils price index was 263 in December 2010, the highest since 264.8 in July 2008 and compared with the record 282.7 set in June 2008.
The monthly sugar price index in December 2010 was a record 398.4. The monthly dairy price index in December 2010 was 208.4, the highest since 209.2 in May 2010 and compared with a record 268.6 in November 2007. The monthly meat price index in December 2010 was a record 142.2.
The record monthly food price index in December led to comparisons with 2007-08, when world food prices surged leading to an increase in the number of the world’s population that was living in poverty and malnourished and food riots erupted in several poor nations.
“We are at a very high level,” said Abdolreza Abbassian, an F.A.O. economist. “These levels in the previous episode (2007-08) led to problems and riots across the world.”
At the same time, Mr. Abbassian pointed to differences from 2007-08. In particular, global wheat and rice stocks are much higher today compared with the earlier period, when world wheat stocks plunged to the lowest levels since 1981-82.
The F.A.O.’s annual food price index illustrated both the recent rise in food prices worldwide and the differences from 2007-08. The F.A.O. 2010 food price index was 179.1, up 18% from 151.5 in 2009 but 6% lower than the record 190.9 in 2008.
The 2010 cereals price index was 182.6, up 5% from 2009 but well short of the record 237.9 in 2008. The 2010 edible oils index was 193, up 29% from 2009 but down 14% from the record 225.4 in 2008. The dairy price index in 2010 was 200.4, up 42% from 2009 but down 9% from a record 219.6 in 2008. But the meat price index and sugar price index set new records in 2010 at 134.9 and 302, respectively.
The F.A.O. food price index consists of the average of six commodity group price indices weighted with the average export share of each of the groups for 2002-04. In total, 55 commodity quotes are considered by F.A.O. in compiling the overall index.