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World food prices rise to record high

FAO reports that world food prices have risen.

The UN's Food and Agricultural Organization (FAO) reports that world food prices rose to a record high in January.

This is the seventh consecutive month that food prices have risen.

The FAO Food Price Index, which measures the wholesale price of foods, averaged 231 points last month, a rise of 3.4 per cent from December 2010, marking the highest level since the organisation started measuring food prices in 1990.

FAO economist and grains expert Abdolreza Abbassian said: "these high prices are likely to persist in the months to come".

All individual food group components of the index registered rises, apart from the meat price index which held steady at 166 points, despite falling prices in Europe where a large amount of animal feed was found to have been contaminated with dioxin.

A slight increase in Brazilian and US meat prices offset the fall in the price of European meat.

The Cereal Price Index was up 3 per cent from December, and the highest since July 2008. This was driven higher by flooding in Australia, which is a major wheat exporter.

Sugar prices remained high due to tight supplies.

Abbassain said: "High food prices are 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 added: "The only encouraging factor 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."