Global food prices surge to their highest level in a decade

Global food prices surge to their highest level in a decade
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Daily US Times: According to the United Nations’ food price index, global food prices rose for the 12th month in a row in May, up nearly 40% year over year. Last month was also the sharpest monthly rise in average food prices in over a decade, spiking 4.8% from April to May.

Abdolreza Abbassian, senior economist for the United Natons Food and Agriculture Organization, says an ongoing drought in Brazil, surprising demand for corn in China and increased global use of vegetable oils, sugar and cereals has caused prices to surge rapidly around the globe.

Abbassian said: “The demand, really I would say, is almost surprising everyone. This demand requires a strong supply response.”

Global inflation is raising prices on virtually everything, from steel to lumber to food and energy. In countries that belong to the Organization for Economic Cooperation and Development, food prices surged in April to the highest rate since 2008.

Higher usage of bio diesels and moderate global price increases for dairy products and meat also contributed to the steep rise in global food prices.

International palm oil quotations reached their highest level since February 2011, the UN report said, due to slow production growth of palm oil in Southeast Asian countries and rising global import needs are keeping inventories low in leading exporting nations.

Abbassian said: “The demand has been quite robust in the vegetable oil sector in general.”

Brazil has cut back on its sugar and corn experts amid its drought and farmers in the US might produce this summer and early fall is a point of concern for food supply administrators and economists.

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