Friday, February 4, 2011

World Food Prices at Highest Level on Record

The United Nations is reporting that that its Food and Agriculture Organisation Food Price Index rose for the seventh month in a row to reach 231, topping the previous record of 224.1 set in June 2008.

The FAO data show that prices for dairy products rose by 6.2 per cent from December, oils and fats gained 5.6 per cent, while cereals went up by 3.0 per cent because of lower global supply of wheat and maize.

The prices increases are the result of growing demand from BRIC countries, especially China, supply disruptions because of bad weather and global central bank money printing led by the Federal Reserve and the Peoples Bank of China.

There appears to be no reason for a slowdown in these price increases, especially as Chinese and U.S. banks continue their money printing ways.

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