Global food prices steady in August: FAO

ROME, Italy – Global food prices remained steady in August, the United Nations food agency said Thursday, September 6, following a jump of six percent in July stemming from a spike in US corn prices.

An overall FAO index of food prices averaged 213 points last month, the same level as in July, the Food and Agriculture Organization (FAO) said.

FAO deputy director David Hallam told a press conference in Rome: “There is a great deal of talk about whether we have some kind of food crisis emerging. There is no strong evidence to suggest that in the price data.”

A statement released by the organization said that “although still high, the FAO index currently stands 25 points below its peak of 238 points in February 2011 and 18 points below its August 2011 level.

A sub index that measures cereal prices averaged 260 points in August, also unchanged on the month, “with some increases in wheat and rice offsetting a slight weakening in maize,” the statement said.

Key agricultural regions in the United States that had been hit by drought have now benefitted from rainfall, while Russia has indicated it would not restrict exports despite a smaller crop in its key farming regions.

FAO director-general Jose Graziano da Silva warned however that “we need to keep vigilant on the prices because we are just starting the season.”

Hallam noted that “US (corn) production was expected to increase by about 10% this year, in practice it’s fallen 13%, so that was quite a shock.

“Given that the US accounts for more than 40% of world exports of maize, that’s a significant development,” he said.

Several panel members condemned the role financial speculation played in inflating food prices in 2008.

“What is clear is that previous price volatility … including price spikes, has been largely due to … excessive speculation. So far, this time round we have seen limited price speculation,” said Jomo Kwame Sundaram, UN assistant secretary general for economic development.

FAO Assistant Director General Laurent Thomas warned that 22 countries, mostly in Africa, are in protracted crisis and said the world must be prepared for food shortages. – Agence France-Presse

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