BUSINESS

UN agency sees sharp rise in international food prices after 3 months of decline

08/09/2012 05:05 EDT | Updated 10/08/2012 05:12 EDT
ROME - International food prices rose sharply in July after three months of decline, driven by a spike in grain and sugar prices, a United Nations report said Thursday.

Severe drought gripping the U.S. Midwest has sent corn prices soaring by almost 23 per cent and expectations of worsened crop prospects in Russia because of dry weather sent world wheat prices up 19 per cent.

The United States is the world's No. 1 exporter of corn, soybeans and wheat and the price hikes are expected to be felt across the international marketplace, hurting poor food-importing countries, said a study by British charity Oxfam issued on the eve of the U.N. report.

The Rome-based U.N. Food and Agriculture Organization said in its monthly price report on Thursday that its index climbed 6 per cent in July although it was well below its peak reached in February 2011.

The agency keeps a close watch on volatile global prices because spikes in the prices of staple foods have led to riots in some countries in recent years

With corn, wheat and sugar prices sharply up, a bright note was that international rice prices remained mostly unchanged, as were dairy prices.

The agency's meat price index also fell.

Oxfam said "millions of the world's poorest will face devastation" from the rising prices. It declared that the days of cheap food are gone.