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MENAFN - Jordan Times - 14/08/2012

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Shoppers buy food items at a supermarket in Amman. According to President of Foodstuff Traders Association, food prices in the local market are set to rise in the coming weeks due to drought in major producing countries (Photo by Raad Adayleh)
(MENAFN - Jordan Times) Domestic food prices are set to soar in the weeks to come as a result of dry weather in major staple food producing countries.

President of the Foodstuff Traders Association Samer Jawabreh said prices of essential commodities on the local market are expected to remain volatile in the coming few weeks, indicating that prices of several staple food products are set to see sharp increases during the last quarter of the year.

"We at the association expect the coming period to be very difficult in regards to food prices," Jawabreh said, blaming unfavourable weather conditions in the US and Russia for the anticipated rise in the prices of essential food products, particularly cereals.

The Food and Agriculture Organisation (FAO) Index, which measures monthly price changes for a food basket of cereals, oilseeds, dairy, meat and sugar, averaged 213 points in July, up 6 per cent from 201 points in June.

According to the FAO, the rise, which followed three months of declines, was driven mainly by a surge in grain and sugar prices.

The organisation said in its monthly index update that the US drought, which is the worst to hit the Midwest in 56 years, had pushed up corn prices by almost 23 per cent in July, and international wheat prices had followed, rising about 19 per cent amid worsening output prospects.

The US is the world's largest corn producer, with nearly 40 per cent of world production, according to Jawabreh, who noted that the deterioration in maize crop will affect fodder and oils.

"As fodder prices are also expected to surge, meat and poultry prices will automatically go up," the sector leader said.

He told The Jordan Times over the phone on Monday that the drought in Russia and Ukraine may put pressure on the international grain market.

According to the FAO Index, sugar prices were up by 12 per cent in July from June, ending the steady fall initiated in March.

The upturn was triggered by untimely rains in Brazil, the world's largest sugar exporter, which hampered sugarcane harvesting in July.

Concerns over delayed monsoon in India and poor precipitation in Australia also contributed to the price increase, according to FAO.


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