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October 05, 2012 at 09:36 AM
The effects of droughts in the U.S. and Russia that have driven food prices higher are likely to last for the next six months, according to the U.N., and the global food market will be in “short supply mode.”
Bloomberg reported Friday that U.N.-monitored food prices are expected to remain high. Hiroyuki Konuma, the regional representative for Asia and Pacific at the UN’s Food & Agriculture Organization (FAO), said in the report that the global market “will switch to a short supply mode,” something it last did two years ago. He added, “We will have to monitor it very cautiously.”
The cost of food globally, according to the FAO, hit its highest level in September in six months, as farmers paying higher prices for feed passed along their increase in cost to produce meat and dairy items to customers. Corn prices in Chicago have risen by half since mid-June on the heels of a 50-year drought that has devastated crops.
A food index made up of 55 different items reached 215.8 points in September. In August it was 212.8, and the average level of the index over the last 20 years has been 131.17.
