World food prices near record high, says UN agency

Asia Business Report's Sharanjit Leyl says governments need to look at ways to increase production

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Global food prices rose sharply in June, according to the UN Food and Agriculture Organisation (FAO), after a steep increase in the price of sugar.

The price of sugar rose by 14% last month, as a result of high demand and lower production in Brazil.

The FAO's food price index reached 234 points in June, close to February's record level of 239.

The sugar price rise fuelled most of the increase, cancelling out falls in prices of wheat, corn and soya.

The FAO's measure looks at a range of essential foods, including cereals, oilseeds, dairy, meat and sugar.

High food prices - particularly those of wheat, rice and corn - have sparked civil unrest in a range of countries where people rely on them for the bulk of their food intake.

They were one of the factors that drove people on to the streets of Arab countries earlier this year.

A global food crisis in 2008 also triggered mass protests, including riots in some developing countries.

World cereal output is forecast by the FAO to be 3.3% higher in 2011-12 than in the year before.

The agency's most recent bi-annual Food Outlook said that spiralling demand meant that global food prices would remain high and volatile throughout this year and into next despite record food production.

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