Food Prices are Highest on Record as Oil Prices Rise
byMar 3rd 2011 5:55PM
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.
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 (FAO). 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. 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. Last month, wheat prices reached two-year highs because of a recent drought in China's winter wheat-producing region. Sugar prices surged in January because of supply constraints stemming from cyclones and floods that hit Australia, the world's third-largest sugar producer behind Brazil and Thailand.