Prices in most commodities are up sharply from last year, and further spikes are likely unless production of major food crops increases significantly in 2011, a UN food agency said on Wednesday.
The Rome-based Food and Agriculture Organisation said that, with most prices being up, international food import bills could pass the $1 trillion dollar mark in 2010.
“With the pressure on world prices of most commodities not abating, the international community must remain vigilant against further supply shocks in 2011 and be prepared,” the agency said in its Food Outlook.
The agency revised its forecast for world cereal production downward, saying it would shrink by 2%. The agency, which had previously forecast a 1.2% expansion in production, said supply shortfalls due to bad weather were to blame. As a result, most cereal stocks are expected to decline sharply, and production should be increased to meet consumption and offset this drop, it said.
“Given the expectation of falling global inventories, the size of next year’s crops will be critical in setting the tone for stability in international markets,” the report said.
Prices shot up most sharply in August when Russia imposed a wheat export ban after severe drought hurt harvests across the region. In October, Ukraine, another major grain exporter, imposed quotas on exports because of the drought.