Despite March Drop From All Time High, Near Record Food Prices Predict Jump In Headline Inflation

Thursday, April 7, 2011
By Paul Martin

by Tyler Durden
ZeroHedge.com
04/07/2011

The UN’s Food and Agriculture Organization, whose January print was the catalyst for us to predict revolutionary food riots ahead of time, released its March food price update – “the Food Price Index (FFPI) averaged 230 points in March 2011, down 2.9 percent from its peak in February, but still 37 percent above March last year. International prices of oils and sugar contracted the most, followed by cereals. By contrast, dairy and meat prices were up.” So in essence the drop in the volatile energy component has been transitory, courtesy of WTI and Brent now at 30 month high, and the April number will be yet another surge. Reuters agrees: “new increases are in sight as demand grows and supplies tighten, the UN Food and Agriculture Organisation said. Rising food prices have climbed to the top of the international political agenda after contributing to protests that toppled the rulers of Tunisia and Egypt earlier this year, with unrest spreading across North Africa and the Middle East.” The spin: “”The decrease in the overall index this month brings some welcome respite from the steady increases seen over the last eight months,” David Hallam, director of FAO’s Trade and Market Division, said in a statement. “But it would be premature to conclude that this is a reversal of the upward trend,” he said.” It isn’t. And with loose monetary policy expected out of the US for as wide as the eye can see, little if anything will change for a long time.

The Rest…HERE

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