Global food prices rose in March for the third month in a row, putting food inflation firmly back on the economic agenda.
The United Nations’ Food and Agriculture Organisation highlighted costlier grains and vegetable oils in its latest calculations.
The FAO fears prices will rise even further in the near term and it is forecasting world wheat output will fall this year.
Part of the increase is from higher oil prices linked to fertiliser production as well as costs related to food distribution and farm machinery use.
Food prices had receded since hitting record highs in February last year when they helped stoke protests linked to the Arab Spring wave of civil unrest in some north African and middle eastern countries.
However Nick Higgins, commodity analyst at Rabobank International explained: “We really saw the (food index) declines in Q4 2011 as being anomalous and related more to sell offs from the threats posed by the European macroeconomic situation rather than agricultural fundamentals.”
The FAO’s senior economist and grain analyst Abdolreza Abbassian said prices could fall in the second half of this year with new crops easing market tension and driving full-year average prices below the record levels of 2011.