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FAO food price index hits record high in January

MILAN (Reuters) – Global food prices hit a record high in January, the U.N Food and Agriculture Organization said on Thursday, adding that prices, already above the 2008 levels which sparked riots, were likely to rise further.

Up for the seventh month in a row, the closely watched FAO Food Price Index touched its highest since records began in 1990, in nominal terms, and topped the high of 224.1 in June 2008, during the food crisis of 2007/08.

The index, which measures monthly price changes for a food basket composed of cereals, oilseeds, dairy, meat and sugar, averaged 230.7 points in January, up from 223.1 points in December.

Surging food prices have come back into the spotlight after they helped fueled protests that toppled Tunisia's president in January. Food inflation has also been among the root causes of protests in Egypt and Jordan, raising speculation other nations in the region would secure grain stocks to reassure their populations.

Severe drought in the Black Sea last year, heavy rains in Australia and dry weather in Argentina and anticipation of a spike in demand after unrest in north Africa and the Middle East has helped power grain prices to multi-year highs.

The FAO's Sugar Price Index soared to a record high of 420.2 points from 398.4 points in December.

Its Cereals Price Index, which includes prices of main food staples such as wheat, rice and corn, rose to an average of 244.8 points in January, the highest level since July 2008 but below its peak in April 2008, the data showed.

The Oils Price Index rose to 277.7 points in January from 263.0 points in December and came close to the June 2008 record level.

The FAO has revised the entire series of the index dating back to 1990 because of a change in calculating its meat component, but June 2008 remained a major food price index peak before January 2011.

(Reporting by Svetlana Kovalyova; editing by Keiron Henderson)