World food prices rise 6% July 2012 after three months decline

World food prices jumped 6% in July 2012 driven by a surge in grains and sugar after three months of decline, according to the Food and Agriculture Organisation’s (FAO) Food Price Index released today August 9, 2012.

The Index, which measures the monthly change in the international prices of a basket of food commodities, averaged 213 points, up 12 points from June even though it was still well below the peak of 238 points reached in February 2011.

“The Index’s sharp rebound was mostly driven by a surge in grain and sugar prices. International prices of meat and dairy products were little changed,” FAO said.

Prices of cereal went up 17% averaging 260 points while wheat quotations surged 19%.

The FAO says severe deterioration of maize crop prospects in the US following extensive drought damage pushed up international maize prices by almost 23% in July.

However, it says international rice prices remained mostly unchanged in July, with the overall Rice Price index stable at 238, barely one point above June.

For sugar, the FAO observed in July, a sharp increase in the Sugar Price Index, which leaped 12%, or 34 points, from June to a new level of 324 points.

“The upturn, ending a steady fall since March, was triggered by untimely rains in Brazil, the world’s largest sugar exporter, which hampered sugarcane harvesting,” the FAO added.

The FAO Meat Price Index averaged 168 points, down 1.7% from the June edition recording the third consecutive monthly fall.

Market weakness characterized the four major meat sectors, in particular pig meat, which saw prices fall by 3.6%, the FAO noted.

Dairy prices were unchanged as it averaged 173 points.

By Ekow Quandzie