According to the United Nations, world food prices have jumped by 2.6 percent in February, representing the sharpest incline since mid 2012.
The United Nations food agency, The Food and Agriculture Organisation (FAO) said that unfavourable weather conditions in the Southern hemisphere and parts of the United States were key to the price rises, The West Australian reports.
FAO’s senior economist, Abdolreza Abbassian said that further volatility in prices could continue through March due to unrest in Ukraine – the world’s 6th largest exporter of wheat.
"The situation in the Black Sea has created a certain level of worry in the markets. It's difficult to predict how this is going to unfold but obviously we are in a very short-term price shock situation," Abbassian said.
"Things could come back to normal once the Ukraine situation improves. Otherwise there could be more volatility in the markets for the foreseeable future."
According to the FAO, prices across all commodity juice with the exception of meat rose, with the strongest price hike reflected in sugar which increased by 6.2 percent from January due to crop damage in Brazil and predictions for a drop in output in India.
Global cereal stocks for 2013 however have reached record production highs with the amount updated to 2.515b tonnes on Thursday – 13m tonnes up for the FAO’s previous forecast.
The FAO also increased the global cereal stocks forecast for the end of 2014 to 578.5m tonnes, 14.5 percent above their reduced opening levels. This was due to higher estimates from Australia and increased revisions from China.
The FAO stated that it was too early to forecast global cereal output for 2014, however its first global wheat estimate is that of 704m tonnes, down 1.7 percent on 2013’s record harvest, but still representing the world’s second largest crop.