In line with warnings made by analysts and officials from the UN Food and Agriculture organisation during June and July, the price of staple food items has rocketed over the past month. The price rises are due to grain market rallies sparked by extreme weather events which will potentially impact on grain yields.

The FAO Food Price Index, which monitors the price of a basket of staple foodstuffs, climbed 6 percent over July after three months of decline. Analysts said rapid increases in grain and sugar prices were behind the rise.

Although the prices have risen steeply FAO said they remain below the record highs recorded in February 2011. Although grains and sugar prices rose steeply, international prices of meat and dairy products were little changed. Cereal Prices were 17 percent higher in July than in June.

The principal factor behind the rises is the upshot of drought in the United States; the US drought is the worst since the 1950s and the severe deterioration of maize crop prospects in particular has sparked panic. This pushed maize prices upwards by almost 23 percent in July, according to FAO.

International wheat quotations also surged 19 percent amid worsened production prospects in the Russian Federation and expectations of firm demand for wheat as feed because of tight maize supplies. Furthermore, major wheat producers in Eastern Europe are also suffering under the effects of drought. In the UK, millers have announced increases in the price of flour coming into effect over this month.

Sugar prices also soared in July, rising 12 per cent from June prices. Until last month, sugar prices had been falling since March. Untimely rains in parts of South America, which has suffered under drought and flooding in this erratic growing year, hampered sugar cane harvesting.

However, international rice prices remained mostly unchanged in July. The FAO overall Rice Price index remains stable, having risen less than one per cent since June. FAO experts also said concerns over India's delayed monsoon and poor rains in Australia contributed to rises.

In contrast to staple grains, the FAO Meat Price Index fell 1.7 percent, the third consecutive monthly fall. Pigmeat led the decline in meat prices, falling 3.7 per cent since June. Following five straight months of decline, dairy prices held steady in July.

Abdolreza Abbassian, a senior economist at the FAO last month expressed concern at the effects rising food prices would have in terms of access to food. He said, "We are concerned for two reasons: first the pace at which price rises are taking place and second because at least for the time being there seem to be no relief in prices, in particular for corn, soybeans and wheat."

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