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World food prices seen high in August on grain rally Despite a fall in global food in the last few months, the recent soaring of grain prices caused by crop worries may be bringing the overall figure back near its record high
World food prices measured by the United Nations' food agency may show a rise in August on the back of a rally in grains, adding to inflationary pressures ahead of the European Central Bank's expected decision on interest rates. The U.N. Food and Agriculture Organization (FAO) is due to update its key monthly Food Price Index Thursday, just as the ECB meets and is widely expected to halt its interest rate hike cycle, driven by concerns about a weak economy rather than worries about rising inflation. The FAO's food index -- which measures price changes for a basket of cereals, oilseeds, dairy products, meat and sugar -- hit a record high of nearly 238 points in February, raising concern of a repeat of the 2008 food crisis which triggered riots in some poor countries. Earlier this year, rising food prices helped fuel protests that toppled rulers in Tunisia and Egypt, with unrest spreading through North Africa and the Middle East, major grain importing regions. Global food prices have fallen back in the last few months, but a rally in international grain prices in August fuelled by crop worries may have brought them closer to record highs again. Benchmark U.S. grain futures rose sharply in August on the back of concerns about summer heat cutting yields of corn and soybeans, with corn futures jumping 14 per cent for the month, wheat gaining nearly 11 per cent and soybeans rising 7 per cent. On the physical markets, the average monthly price of benchmark U.S. Hard Red Winter wheat rose to US$331.00 a tonne in August from $308.00 a tonne in July, while U.S. maize rose to $308.38 a tonne from $301.74 a tonne, the FAO's database showed. Thai rice jumped to $582.25 a tonne in August from $548.20 a tonne in July, according to the database. In July, global food prices held near three-year highs and, together with low stocks, built up pressure on the developing countries, the World Bank said in August.
