1/6/2011 --- Prices of corn, wheat and other grains can go much higher and current weather patterns are of concern, the United Nations' Food and Agriculture Organization (FAO) has warned.

Global food prices rose in December, with the FAO Food Price Index at a record high, the FAO reported, past 2008 highs when rising food prices sparked violent riots in several countries.

Up for the sixth month in a row the index was the highest since records began in 1990, in nominal terms, and topped the high of 213.5 in June 2008, during the food crisis of 2007/08.

The index, which measures monthly price changes for a food basket composed of cereals, oilseeds, dairy, meat and sugar, averaged 214.7 points in December 2010, up from 206.0 points in November 2010.

The trade-weighted FAO index monitors the monthly change in a basket of 55 commodities, including meat, dairy, cereals, oils and sugar. Some of those categories are actually lower than they were in June 2008. But others are substantially higher. For instance, the cereal index, which includes wheat and rice, is 13% lower than in June 2008; the sugar index has more than doubled.

The overall FAO index rose 4.3% in December, largely driven by significant monthly price increases in cereals and sugar. The indexes for those food groups rose 6.4%, and 6.7%, respectively, in December from November.

The agency said the index was driven by the rising prices of sugar, cereal, meat and oil, stressing that the current situation is different from that of 2008 when the surge in prices was prompted by lower food production in poor countries.

The price of rice, one of the two most important cereals for world food security, has remained consistent. But the cost of wheat, the other critical cereal, has risen steeply mainly because of the recent flooding in Australia, last year's drought in Russia and the heavy rains that affected planting in Canada.

The price of corn has also risen considerablly in recent years due to its increased usage for manufacturing biofuels, specially in the United States. Another factor for the rise in corn prices is the drought in Argentina, which is the world's second biggest exporter of corn behind the U.S.

The UN agency also warned in its monthly report that global production of food gains should rise by at least 2% this year to meet the ever increasing demand without depleting stocks.

A mix of high oil and fuel prices, growing use of biofuels, bad weather and soaring future markets pushed up prices of food in 2007/08, sparking violent protests in countries including Egypt, Cameroon and Haiti.

UN Food and Agriculture Organisation economist Abdolreza Abbassian said the organisation was worried by the unpredictability of current weather, given the already high price levels and low supply of some grains.