World food prices surge from lows - UN

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Rudy Ruitenberg Paris

World food prices rose 2.6 percent month on month in February, the biggest jump in 19 months, as prices for cooking oils, grains, dairy and sugar rose, the UN’s Food and Agriculture Organisation (FAO) said yesterday.

An index of 55 food items rose to 208.1 points from a restated 202.9 in January, when it had dropped to the lowest level since June 2012, the FAO wrote in a report. The gauge was still down 2.1 percent year on year.

Coffee, pork, maize and sugar are the best performers on the Standard & Poor’s GSCI gauge of 24 commodities so far this year, after sliding last year.

Palm oil prices rose last month on concern about drought in south-east Asia, while sugar gained on worries of damage from dry weather in Brazil, the FAO said.

“Last month’s rebound… resulted from strengthening quotations of all the commodity groups making up the index, except meat,” the FAO wrote.

The FAO’s index of grain prices advanced 3.6 percent in the month, although it was still down 19 percent year on year.

The jump in grain prices followed concern about wheat crops in the US, the FAO said. Freezing temperatures might have caused some winter kill damage in the US Plains, Commodity Weather Group said.

The cooking oils index gained 4.9 percent month on month. Palm oil futures jumped 9.4 percent in Malaysia last month on concern reduced rainfall would hurt yields.

A gauge of sugar prices leapt 6.2 percent in the month, while dairy costs advanced 2.9 percent. The FAO meat price index slipped 0.3 percent.

In another report, the FAO forecast the world wheat crop would drop 1.7 percent this year on lower yields and area planted in Canada. Yields in the former Soviet Union would return to average levels from last year’s highs. – Bloomberg

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