Wheat pushes world food prices up

The UN Food and Agricultural Organization (FAO) says that world food prices have risen to their highest level in two years.

It says the increase is due partly to a drought in Russia and to government export restrictions which have brought about a surge in the price of wheat.

The Rome-based agency says that its food price index shot up 5% between July and August.

However, this is 38% down from its peak in June 2008.

The UN agency says there are sharp differences between the current situation and the spring of 2008, when the price of oil and demand for biofuels pushed world food stocks to their lowest levels since 1982.

It also reduced its forecast for global production of food staples in 2010.

The FAO now thinks that world cereal production will be 1.8% lower than its June forecast. (more)