Rising wheat prices trigger big spike in food costs: FAO
Rising wheat prices caused the biggest monthly spike in food prices in August since November 2009, the United Nations' Food and Agriculture Organisation (FAO) said on Wednesday.
The FAO's food price index in August reached its highest level since September 2008, rising by five percent to an average of 176 points, the FAO said in a statement.
The hike "reflected the sudden sharp rise in international wheat prices following drought in the Russian Federation and the country's subsequent restrictions on wheat sales," the statement said, adding that other drivers included higher sugar and oilseed prices.
FAO estimated that in spite of the disruption, this year's wheat crop would be the third highest ever at 646 million tonnes, five percent down from 2009.
Russia saw 10 million hectares (25 million acres), or a quarter of arable land destroyed in its worst drought on record this summer.
Prime Minister Vladimir Putin shocked markets by announcing that from August 15 Russia would ban grain exports to keep prices down at home and ensure there was enough feed grain for its cattle herd.
He has also slashed the grain harvest forecast for Russia, one of the world's top wheat producers, saying it would produce 10 million tons less than planned at 60-65 million tons.
© 2010 AFP