A report in the Farmers Guardian says that global agricultural commodity prices are set to remain high and volatile for the rest of the year and into 2012, according to the UN's Food and Agricultural Organisation (FAO).
The FAO’s latest biannual Food Outlook cites a ‘sharp rundown on inventories and only modest overall production increases for the majority of crops’ as reasons for continuing strong prices.
Its analysis coincides with new figures from the British Retail Consortium (BRC) showing UK food inflation hitting nearly 5 per cent in May, on the back of soaring commodity prices.
Commenting on the global commodity markets, David Hallam, director of FAO’s markets and trade division, said: “The general situation for agricultural crops and food commodities is tight with world prices at stubbornly high levels, posing a threat to many low-income food deficit countries.”
International food prices, which earlier this year soared to levels seen in the 2007-8 food crisis, dropped one per cent in May but remained 37 per cent above May 2010 levels, according FAO’s food price index.