DUSHANBE, March 4, 2011, Asia-Plus  -- Global food prices increased for the eighth consecutive month in February, with prices of all commodity groups monitored rising again, except for sugar, FAO said on March 3.

FAO expects a tightening of the global cereal supply and demand balance in 2010/11.  In the face of a growing demand and a decline in world cereal production in 2010, global cereal stocks this year are expected to fall sharply because of a decline in inventories of wheat and coarse grains. International cereal prices have increased sharply with export prices of major grains up at least 70 percent from February last year.

“Unexpected oil price spikes could further exacerbate an already precarious situation in food markets,” said David Hallam, Director of FAO''s Trade and Market Division.  “This adds even more uncertainty concerning the price outlook just as plantings for crops in some of the major growing regions are about to start,” he added.

The FAO Food Price Index averaged 236 points in February, up 2.2 percent from January, the highest record in real and nominal terms, since FAO started monitoring prices in 1990.

The Cereal Price Index, which includes prices of main food staples such as wheat, rice and maize, rose by 3.7 percent in February (254 points), the highest level since July 2008.

The FAO Meat Price Index averaged 169 points in February, up 2 percent from January.  By contrast, the FAO Sugar Price Index averaged 418 points in February, slightly below the previous month but still 16 percent higher than February 2010.

FAO expects winter crops in the northern hemisphere to be generally favorable and forecasts global wheat production to increase by around 3 percent in 2011. This assumes a recovery in wheat production in major producing countries of the Commonwealth of Independent States.  So far, conditions of winter crops in those countries are generally favorable.

The latest estimate for the world cereal production in 2010 is 8 million tons more than was anticipated in December but still slightly below 2009.  The forecast for world cereal utilization in 2010/11 has been revised up by 18 million tons since December.

In the meantime, prices of basic food products are continuing to rise in Tajikistan.  According to the data from the Ministry of Economic Development and Trade (MEDT), wheat flour prices have rose 17.9 percent at Dushanbe’s bazaars in two months to March 1, 2011, reaching 141.50 somoni (equivalent to US$32.00) for a 50-kilogram of imported wheat flour grade 1 and 127.50 somoni (equivalent to US$20.00) for a 50-kilogram sack of domestic wheat flour.

The price of one liter of vegetable oil has risen 8.6 percent over the report period, reaching 10.50 somoni (equivalent to US$2.50).

Fuel prices have also risen in the country over the past two months.  The price of one liter of 95-octane gasoline in Dushanbe has risen from 4.50 somoni in early January to 4.70 somoni, with similar price rises in other parts of the country.