Crimea crisis pushes up global food prices

Thursday 03 April 2014 13.06
The rise in cereal prices reflected concern about supplies from Ukraine
The rise in cereal prices reflected concern about supplies from Ukraine

World food prices reached their highest level for 10 months in March, the United Nations food agency said today.

The rise in prices is due to poor weather in major producing countries and the crisis in Ukraine, a top grain exporter, the UN said.

The Rome-based Food and Agriculture Organisation (FAO) said its monthly food price index rose by four points to 213 points, which is an increase of 2.3% from February and the highest level since May 2013.

"The index was influenced, as expected, by unfavourable weather conditions in the US and Brazil and geopolitical tensions in the Black Sea region," FAO senior economist Abdolreza Abbassian said.

The index saw a particularly sharp rise in the price of sugar, which went up by 7.9% to 254 points, while cereals rose by 5% to 206 points.

The rise in cereal prices reflected concern about supplies from Ukraine, one of the top producers in the world and a key exporter to North Africa.

"The initial fear over disruptions in grain shipments from Ukraine has subsided," Mr Abbassian added. 

The FAO also downgraded its forecast for global cereal supplies this year to 702 million tonnes from an earlier estimate of 704 million tonnes made last month.

The rice harvest, however was predicted to rise by 0.8% to 500 million tonnes although FAO said rice production was not keeping up with population growth.