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Global food prices hit record high
February-5-2011

Global food prices reached a new record peak in January, the UN Food and Agriculture Organization ( FAO) warned on Thursday in an update of its Food Price Index.

According to FAO, food prices have been steadily rising since the last seven months. The food price index averaged 231 points in January, up 3.4 percent from December 2010. The rise, the highest since FAO started measuring food prices in 1990, was mainly due to surging international wheat and maize prices amid tightening supplies.

While ruling out a new food crisis similar to that of 2007-2008, the Rome-based agency has repeatedly urged countries not to underestimate hiking food prices, especially in front of a long- term trend which may trigger excessive market volatility.

"The new figures clearly show that the upward pressure on world food prices is not abating," said FAO economist and grains expert Abdolreza Abbassian.

"These high prices are likely to persist in the months to come and this is of major concern especially for low-income food deficit countries that may face problems in financing food imports and for poor households which spend a large share of their income on food," he warned.

The only encouraging factor, added Abbassian, so far stems from a number of countries, where due to good harvests domestic prices of some of the food staples remain low compared to world prices.