Although UN Food and Agriculture Organisation figures suggest food prices remained stable for the past 5 months, with little fluctuation between October 2012 and March this year, when prices rose one percent, researchers in the United States claim that longer-term analysis shows prices are rising year on year.   

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Researchers from the Worldwatch Institute in Washington DC announced on Thursday that prices have been increasing steadily for the past decade. According to the Washington DC-based research group, prices rose 2.7 percent in 2012, reaching levels not seen since the 1960s and 1970s but still well below the price spike of 1974.

The price increases reverse a previous trend when real prices of food commodities declined at an average annual rate of 0.6 percent from 1960 to 1999, approaching historic lows. Along with higher price levels, volatility has also increased dramatically in recent years. According to the Food and Agriculture Organization (FAO), the standard deviation----or measurement of variation from the average----for food prices between 1990 and 1999 was 7.7 index points, but it increased dramatically to 22.4 index points in the 2000-12 period.

Over the same period, the World Bank global food price index increased 104.5 percent, at an average annual rate of 6.5 percent. Despite an end-of-year decline in 2012, international wheat prices were 17 percent higher in January 2013 than they were a year earlier, and maize prices were 11 percent higher.

Worldwatch researchers claim this volatility can be linked to a number of factors which have recently risen to prominence, these include the effects of "climate change, an increase in biofuel production, rising energy and fertiliser prices, and increased trade within futures markets for food commodities." Illustrating its contribution to rising prices, researchers said biofuel production increased by more than 500 percent between 2000 and 2011, due in part to higher oil prices and the adoption of biofuel mandates in the United States and EU.

Researchers also said population growth and increasing affluence in some economies experiencing rapid growth have led to rising food demand, and increased consumption of more resource dense foods since 2000.

Due to the ubiquity of maize, wheat, and rice in global diets, changes in the price of cereal grains generally affect consumers more than fluctuations in other foods. Since food prices began increasing in the early 2000s, cereal prices have jumped more than 80 percent and exhibited significant volatility, FAO figures show.

Continuing this trend, global cereal prices increased 12.3 percent in 2012. Unfavourable weather conditions----including severe drought in the United States and Eastern Europe----drove cereal prices up 18.2 percent between June and September, when they approached the all-time high observed in 2008.

Worldwatch rapporteur Sophie Wenzlau said on Thursday, "There is reason to believe that food commodity prices will be both higher and more volatile in the decades to come. As climate change increases the incidence of extreme weather events, production shocks will become more frequent. Food prices will also likely be driven up by population growth, increasing global affluence, stronger linkages between agriculture and energy markets, and natural resource constraints."