UN Food and Agriculture Organisation (FAO) on Friday said global food prices reached an all-time high in February.
The Food Price Index, which tracks the international prices of items such as vegetable oil and dairy products, averaged 140.7 points last month, or nearly 4 per cent up from January.
This is also 24.1 per cent over the level a year earlier and 3.1 points higher than in February 2011.
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“Concerns over crop conditions and adequate export availabilities explain only a part of the current global food price increases. A much bigger push for food price inflation comes from outside food production, particularly the energy, fertiliser and feed sectors,” said FAO economist Upali Galketi Aratchilage.
“All these factors tend to squeeze profit margins of food producers, discouraging them from investing and expanding production.”
As the Food Price Index measures average prices over the month, the February reading only partly incorporates market effects stemming from the conflict in Ukraine.
The overall rise last month was driven by an 8.5 per cent increase in the FAO Vegetable Oils Price Index, a new record high.
This was mostly due to sustained global import demand, which coincided with a few supply-side factors, such as lower soybean production prospects in South America.
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