Global food prices to stay high till mid '13: FAO

Global food prices are expected to stay high in the next six months after drought in the US and Russia cut grain supplies, according to the UN.

Bloomberg quoted Hiroyuki Konuma, the regional representative for Asia and Pacific at the UN's Food & Agriculture Orgainzation as saying in a telephone interview that the global market would switch to a short supply mode for the first time in two years.

He added it would have to be monitored very cautiously.

World food costs were up in September to the most expensive in six months with dairy and meat producers passing on higher feed prices to users, the FAO said yesterday.

An index of 55 food items rose to 215.8 points in September from 212.8 a month earlier and against a 131.17 average in the past 20 years. Corn traded in Chicago was up 50 per cent since the middle of June as the worst US drought in half a century killed crops.

Food prices monitored by the UN might be up 15 per cent by June, surpassing the record set in February 2011, according to Nick Higgins, an analyst at Rabobank International, in a report on 19 September (See: Rabobank warns of record high food prices).