Global food prices up in Jan, snap 6-month downtrend

Friday, February 10, 2012
By Paul Martin

FinancialMirror.com
09 February, 2012

Global food prices rose in January for the first time in six months and may show another rise for February, as concern about bad weather in main growing regions boosted grain and vegetable oil values, the United Nations’ food agency said on Thursday.

January’s increase was not expected to heap as much inflationary pressure on economies as a year ago, when prices were climbing towards record highs, the U.N.’s Food and Agriculture Organisation (FAO) said ahead of the European Central Bank’s decision on interest rates.

Global food prices, which have been falling since July 2011, rose nearly 2 percent in January from the previous month, with the FAO food price index averaging 214 points.

“It is a pause in a downward trend rather than reversal, with a lot of unpredictability,” the FAO’s senior economist Abdolreza Abbassian told Reuters in a telephone interview.

“There is scope for an increase in prices in February given what we’ve seen in the first week,” Abbassian said, adding that high energy prices, exchange rate and strong equity markets could push food prices higher this month.

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