As if we needed another sign the commodities price rise was starting to hit home, the UN has released some serious data on the food price spike.It’s real, and now prices are higher than they’ve ever been before.
So why is this happening? Well it has a something to do with rising commodity prices globally, partially brought on by those commodities being priced in dollars. But that’s probably what we’re talking about in this UN data.
The UN data has to do with surging demand from emerging markets that are rapidly developing and demanding more food. Also of concern is a series of weak harvests across the world, the recent flood crisis in Australia and the fires in Russia included.
If you break down the index to its component parts, you can see that even more. Sugar prices went mad in 2010, due to farming problems in Brazil and lower than expected export quotas from India.This is going to be huge in 2011 and may eventually impact the stability of some emerging markets.