UN: Global food prices highest in 2 years, drought in Russia partly to blame

UN: Global food prices highest in 2 years

ROME — International food prices have risen to their highest level in two years, fueled in part by a drought in Russia that lifted the cost of wheat, a U.N. agency said Wednesday.

The Rome-based U.N. Food and Agriculture Organization said its food price index shot up 5 percent between July and August. But that was still 38 percent down from its peak in June 2008.

Drought in Russia — and the country’s subsequent restrictions on wheat exports — forced a sudden sharp rise in wheat prices, the agency said. Higher sugar and oilseed prices also were factors in the higher index.

The agency’s Abdulreza Abbassian said there were sharp differences between the current price situation and the spring of 2008, when high oil prices and growing demand for biofuels pushed world food stocks to their lowest levels since 1982.

Stocks are much higher now and even while the forecast for world cereal production in 2010 has been lowered it is still expected to be the third highest on record.