2260810 30% of South African commercial famers will no longer be able to farm due to to the price of maize.photo by Simphiwe Mbokazi

The UN Food and Agricultural Organisation's (FAO) food price index published on Thursday, rose 1%, or 2.4 points from January to February. The Index climbed nearly 2% in January, its first increase in six months.

The increase in the February index was mostly driven by higher prices of sugar, oils and cereals, while dairy prices fell slightly after a marked rise in January. At its current level, the index was 10% below its peak in February 2011.

Increased imports due to a weaker US Dollar and plunging freight rates also characterised world markets since the beginning of 2012, the FAO noted.

This, combined with unfavourable weather conditions in major exporting countries had supported world prices in recent weeks, FAO said.

World wheat production in 2012 would be the second highest on record at 690 million tonnes, according to FAO's quarterly crop prospects and food situation report released on Thursday.

The report forecast a 2012 wheat crop 10 million tonnes or 1.4% down from the record 2011 harvest but still well above the average of the past five years.

Although plantings increased or were forecast to increase in many countries in 2012 in response to continuing strong prices, a return to normal yields was expected in areas where record highs were achieved last year, the report said.

It was still too early for a global forecast of 2012 cereal output, it added.

The report noted a firming of international cereal prices in recent weeks due to tightening current wheat supplies and concerns over the impact of severe cold weather in Europe and the Commonwealth of Independent States.

Adverse weather in West Africa caused a sharp drop in cereal and pasture production in large parts of the Sahel, said the report. This, combined with high food prices and civil strife, led to high food insecurity and increased malnutrition in several countries, notably in Niger, Chad, Mauritania, Mali and Burkina Faso.

In Southern Africa, overall crop prospects remained satisfactory despite dry spells and cyclones in some areas, said the report. -

I-Net Bridge