May 15, 2008 / 1:22 PM / 9 years ago

U.N. index hints at end of food price surge

<p>Organic vegetables are shown at a Whole Foods Market in LaJolla, California May 13, 2008. REUTERS/Mike Blake</p>

ROME (Reuters) - A food price index compiled by the United Nations’ Food and Agriculture Organization stabilized in April, hinting that a surge in food inflation may be nearing an end, the FAO said on Thursday.

The FAO's monthly Food Price Index fell for the first time since January 2007 to 216.7 from March's 217.0, according to figures available on its website here

“It seems to indicate that the worst seems to be behind us,” FAO’s grains economist Abdolreza Abbassian told Reuters.

The FAO has said that food riots experienced in several developing countries could worsen if food prices continue to spiral. The body hosts a food summit in Rome on June 3-5 to look at a global response to the food insecurity crisis.

Rice was the only cereal to post price rises in the April food price index.

Abbassian said rice price could stop rising if producer countries lifted export bans they imposed to protect local supplies in the face of global demand.

Striking a note of caution he said the data were not absolute proof the price surge was over and certainly did not point to price falls.

“We need to be very cautious about this. A lot depends on this year’s crops. With all these natural disasters from all sides one doesn’t want to be too sure about prospects at this time,” he said.

“We don’t have a bubble that’s going to explode, rather a modest decline (in coming months) with occasional spikes due to volatility in various markets.”

A significant fall in wheat prices over recent weeks as farmers increased production was one of the key factors that caused the index to level out in April, he said.

Editing by Chris Johnson

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