FAO Food Price Index

The FAO Food Price Index for March averages 216 points, virtually unchanged from February's FPI at 215 points. Cereal prices also rose only one point. Low maize inventories and a strong soybean market caused a slight increase in maize prices, but sufficient wheat supplies kept that commodity's prices stable. Overall, only oils/fats prices showed strong growth due to a tightening of the expected 2011/2012 supply and demand balance.

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GIEWS has released the latest Global Food Price Monitor, citing a decline in the FAO Food Price Index for the third straight month. International grains prices fell in September, while the price of rice rose on the global market. Eastern Africa continues to experience cereal prices that are two to four times higher than they were this time last year.

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In a recent issue of Foreign Affairs , Christopher Barrett and Marc Bellemare write a stimulating note on the recent price movements in agricultural commodity markets. They appear to have three clear messages for policymakers:

First, price levels and price volatility are different concepts. In recent months, markets have been characterized by very high price levels, but volatility “although high these past few years, is not out of line with historical experience and is generally lower than it was in the 1970s.”

Global food prices saw a slight dip in March, falling 2.9 percent from their February peak, according to the latest FAO Food Price Index. Despite this decrease, food prices remain significantly higher than their March 2010 levels. Grain prices continued to experience extreme volatility.

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Global food prices increased for the eighth consecutive month in February, according to the FAO Food Price Index. With the exception of sugar, prices of all agricultural commodities continue to rise, bringing the Price Index to its highest level on record. In particular, the FAO expects a sharp decline in cereal stocks in 2011 due to increased global demand and decreased production. Export prices of major grains have risen 70 percent since February 2010.

To view the full report, visit FAO - News Article: World food prices reach new historic peak