Food prices reach new highs

Published by Rebecca Rutt on 04 February 2011.
Last updated on 04 February 2011

Woman shopping

There's more bad news for the UK's struggling households as world food prices rose to record highs in January up 3.4% from December. The increase is the seventh consecutive monthly rise since 1990.

The only food group to remain unchanged was meat, with rises in all other commodity groups, according to the UN's Food and Agricultural Organisation (FAO).

This is the highest level since records began for the FAO Food Price Index, which measures the wholesale cost of basic foods.

Dairy prices were particularly high and rose 6.2% from December, however these were still below peaks seen in November 2007. The sugar price index was up 5.4% reflecting the continued high international prices of sugar combined with tight global supplies.

Read: 10 ways to help you save at the supermarket

Increases in international prices of wheat and maize, amid tightening supplies, helped push the cereal price index up 3% from December while the prices of oils and fats rose 5.6% in reaction to imbalances in the supply and demand balance.

Meat remained at a consistent price due to falling prices in Europe after a decline in consumer confidence following a feed contamination scandal, balanced out by an increase in export prices from Brazil and the United States.

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Pressure mounting

FAO economist, Abdolreza Abbassian, says these figures show the upwards pressure on world food prices is not abating and are likely to persist in the months to come.

"High food prices are of major concern especially for low-income food deficit countries that may face problems in financing food imports and for poor households which spend a large share of their income on food" he adds.

Aid groups have expressed concern that high prices are putting millions of lives at risk and threaten food riots around the world, while here in the UK weekly shopping budgets will feel the pinch as food prices are set to increase further.

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