UNITED NATIONS — Global food prices are moving ever higher, hitting record levels last month as a jittery market reacted to unpredictable weather and tight supplies, according to a U.N. report released Thursday.
It was the seventh consecutive month of food price increases, according to the United Nations Food and Agriculture Organization, which put out the report. And with some basic food stocks low, prices will probably continue reaching new heights, at least until the results of the harvest next summer are known, analysts said.
“Uncertainty itself is a new factor in the market that pushes up prices and will not push them down,” said Abdolreza Abbassian, an economist and the grain expert at FAO. “People don’t trust anyone to tell them about the harvest and the weather, so it has to await harvest time.”
Scattered bright sports in the report led experts to suggest that a repeat of the 2008 food riots stemming from similar sharp price increases might not be imminent. Rice was slightly cheaper and meat prices stable, they noted. But the overall uncertainty and inflation could eventually make the situation worse than three years ago, they said.
Riots and demonstrations erupting across the Middle East are not directly inspired by rising food prices alone, experts noted, but that is one factor fueling the anger directed toward governments in the region. Egypt was among more than a dozen countries that experienced food riots in 2008.
The FAO price index, which tracks 55 food commodities for export, rose 3.4 percent in January, hitting its highest level since tracking began in 1990, the report said. Countries not dependent on food imports are less affected by global volatility. Still, food prices are expected to rise 2 percent to 3 percent in the United States this year.
Four main factors are seen as driving prices higher: weather; higher demand; smaller yields; and crops diverted to biofuels. Volatile weather patterns often attributed to climate change are wreaking havoc with some harvests. Heavy rains in Australia damaged wheat to the extent that much of its usually high-quality crop has been downgraded to feed, experts noted.
Brokers are waiting to see how acreage in the United States will be divided between soybeans, corn and cotton, with cotton fetching record prices, Abbassian said.
Sugar prices are also at a 30-year high, he said. Prices for cereals are rising but still below their April 2008 peak. Oils and fats are up and close to their 2008 level, and dairy is higher but still below its 2007 peak, the report said.