Food prices jump 24pc to hit record high

World food prices hit a record high in February, led by a surge in vegetable oils and dairy products, to post a 24.1  per cent increase year-on-year, the UN food agency said on Friday.

The Food and Agriculture Organization's (FAO) food price index, which tracks the most globally traded food commodities, averaged 140.7 points last month against a downwardly revised 135.4 in January. That figure was previously given as 135.7.

Higher food prices contributed to a broader surge in inflation as economies recover from the pandemic and the FAO has warned the higher costs are putting poorer populations at risk in countries reliant on imports.

FAO economist Upali Galketi Aratchilage said concerns over crop conditions and export availabilities provided only a partial explanation to the increase in global food prices. "A much bigger push for food price inflation comes from outside food production, particularly the energy, fertilizer and feed sectors," he said.  "All these factors tend to squeeze profit margins of food producers, discouraging them from investing and expanding production."

 Data for the February report was mostly compiled before the Russian invasion of Ukraine. Concerns over tensions in the Black Sea area were already weighing on agricultural markets even before the violence flared, but analysts warn a prolonged conflict could have a major impact on grain exports.

FAO said its vegetable oils index rose 8.5 per cent month-on-month in February to chalk up another record high, propelled by rising palm, soy, and sunflower oil prices. Ukraine and Russia account for about 80  per cent of global exports of sunflower oil.