Food prices remain "high but steady"

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Sugar stocked in a warehouse in Limeira, Sao Paulo state, Brazil.FAO@PHOTO

World food prices have remained high but steady, according to the UN Food and Agriculture Organization (FAO).

The FAO Food Price Index averaged 206.7 points in December, largely unchanged from the previous month.

However, FAO Senior Economist Abdolreza Abbassian cautions about interpreting the overall average prices.

He points out that prices for some of the commodities such as cereals or sugar plunged sharply in 2013 because of improvement in supplies and near record level production.

"This supply recovery has resulted in a big price correction in those sectors. On the other side of the equation, however, we witnessed huge surges in prices of commodities especially in high protein fronts like meat and dairy. And here, for example, in fact 2013 marked a year where prices were at record levels. And this upward pricing has been going on now for a number of months. And the reason for it is demand. It is hugely demand driven, especially from Asia." (29")

Abdolreza Abbassian says the increase in demand is putting up the prices of those commodities, offsetting declines that have been seen in grain prices.

Derrick Mbatha, United Nations

Duration:1’30″

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