September 2, 2010 8:49 AM

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Food prices touch highest level in two years: UN-FAO

The UN Food and Agricultural Organization (FAO) says that world food prices have risen to their highest level in two years. It says the increase is due partly to a drought in Russia and to government export restrictions which have brought about a surge in the price of wheat.The Rome-based agency says that its food price index shot up 5% between July and August. However, this is 38% down from its peak in June 2008.It also reduced its forecast for global production of food staples in 2010. The FAO now thinks that world cereal production will be 1.8% lower than its June forecast.

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