Already Record Food Prices Rise By 3.4% In January

Tyler Durden's picture

When last month we highlighted the FAO's periodic report which noted that food prices had surged to a fresh all time high, Zero Hedge first predicted that food riots were imminent. Fast forward 6 rioting countries and 2 revolutions later, to today when we get an update from the UN's Food and Agriculture Organization, where we read that, not surprisingly "the FAO Food Price Index (FFPI) rose for the seventh consecutive month, averaging 231 points in January 2011, up 3.4 percent from December 2010 and the highest (in both real and nominal terms) since the index has been backtracked in 1990." And while it is painfully obvious to anyone who shops for groceries, but not to Genocide Ben, nothing is ever obvious to him, here is Reuters' take on the numbers: "Up for the seventh month in a row, the closely
watched FAO Food Price Index touched its highest since records began in
1990, in nominal terms, and topped the high of 224.1 in June 2008,
during the food crisis of 2007/08
." Yes, oil may not be at its all time highs from the summer of 2008, but food has already surpassed it.

A graphic presentation of what guarantees many more revolutions, courtesy of Gen Ben:

More from Reuters:

Surging food prices have come back into the spotlight after they helped fueled protests that toppled Tunisia's president in January. Food inflation has also been among the root causes of protests in Egypt and Jordan, raising speculation other nations in the region would secure grain stocks to reassure their populations.

Severe drought in the Black Sea last year, heavy rains in Australia and dry weather in Argentina and anticipation of a spike in demand after unrest in north Africa and the Middle East has helped power grain prices to multi-year highs.

The FAO's Sugar Price Index soared to a record high of 420.2 points from 398.4 points in December.

Its Cereals Price Index, which includes prices of main food staples such as wheat, rice and corn, rose to an average of 244.8 points in January, the highest level since July 2008 but below its peak in April 2008, the data showed.

The Oils Price Index rose to 277.7 points in January from 263.0 points in December and came close to the June 2008 record level.

On the other hand, the anger which will sooner or later be focused on none other than Ben Bernanke for starting a wave of global revolutions, may be diluted a little bit after JC Trichet said during a media press conference earlier that "inflation is contained." It appears he is also 100% confident that years of pent up hunger and anger can be eliminated with a 15 minute waving of a magic wand.

As usual, keep an eye on cotton, wheat and rice: with central bankers now stuck firmly in denial, these are the only indicators that matter.

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Cognitive Dissonance's picture

"Pay no attention to the inflation behind the curtain. I am the mighty Ponzi OZ."

Ben Bernanke practicing in front of the mirror.

eigenvalue's picture

Guess the ultimate fate of the Bernank would be neither a guillotine or an electric chair. He would be eaten alive by hungry citizens..

SilverDOG's picture

As he is only an actor performing for; borrowers from, owners of, and the slaves cowering below, FLS Federal Loan Shark.

Cognitive Dissonance's picture

Blythe and The Monkeys.

Sounds like an acid rock bank from the 70's. Could you hum a few bars so I can see if it sounds familiar? :>)

Pictured below is the band during the early years. Blythe is on the left.

Mr Lennon Hendrix's picture

Too bad she doesn't still wear diapers.  I am sick of her sh*t!

Mr Lennon Hendrix's picture

Today, will PMs form a W, or a checkmark?  They are going up from here no matter.  Silver likes support at $28, the dollar is dead, and Bernanke is typing his resume as we speak...

Dear Lloyd,


ColonelCooper's picture


Got room on the right side of that page to squeeze in oil? 

Clayton Bigsby's picture

Congress blames "wicked" speculators in... 3... 2... 1....

Xibalba's picture

Pakistan will fall next. 

Sudden Debt's picture

The exiting part is picking the continent which will have the most food riots in 2011.


So at horse track:

Africa is the favorite and is running in front of the rest but Asia is comming out of the curve with lightning speed! America and Europe are picking up speed as well but they are still way behind...

oogs66's picture

What countries has China purchased the most farmland in?  I can't wait for a food riot in one of those countries so China has a good excuse to send in the troops to protect their food supply.

tmosley's picture

Oh shit, the Chinese have time travel?

Matt's picture

I guess that's what they meant about leap-frogging past the west. Now they can go back in time and invent things before the west, putting themselves even further ahead. If you aren't long China, it'll be too late as we will have already passed their boom phase and they will already be going bust.

whatsinaname's picture

If Pakistan falls, India and China will not be far behind. DBA is really skying now..

btw..wonder if there are are some massive derivatives tied to a certain level of the S&P500 which TPTB want to achieve w/o which it would be a disaster. These derivatives may have been written in the cocky and golden times of 1995-2008. BRK already has something similar ?

Agent P's picture

"Pakistan will fall next."

Scary thought...although I'd wager their military would act a little differently than Egypt's has if it comes to that.

hardcleareye's picture

If Pakistan falls, what happens to it's nukes?  Is there a contingency plan in place?  If I recall those nukes were aimed at India, and India's are aimed at Pakistan.  I haven't read much about the current tension levels between India and Pakistan lately, perhaps it's cooled or is it foreshadowed by other regional events?

Matt's picture

hopefully the situation is being overshadowed, because if other regional events are foreshadowing, that would be bad.

ak_khanna's picture

The primary thing driving up commodity prices worldwide are speculators armed with cheap money provided by central bankers and super fast computers. This is causing a havoc in the lives of rest of the population and pushing them towards poverty as they can no longer afford the basic necessities of life.

Regulators are either hand in glove with the banksters or are too slow to react and take ages to identify and take measures to solve the problems.

Total ban on speculation and the reinforcement of Glass Steagall Act is strictly required to bring relief to the man on the street.

the not so mighty maximiza's picture

I forgot where I saw it, but the British allready told Obama that if he re installs Glass Steagal, it would be considered an act of war against the crown.  

Caviar Emptor's picture

Sorry, that's always the first scape goat every time this happens. And prices have never returned to prior levels no matter what measures are taken to cut 'speculation'. The overwhelming bulk of it is this: Global Competition for Limited Resources. And in some cases declining resources. 

Big economies are getting bigger and more populated. Demand is outstripping supply and production in almost every category across the board. Many key commodities are long past their peak production levels. And outright depletion is beginning to appear in some notable areas. The US imported and spent more than it produced on a grand scale for decades and that put lots and lots of money into the hands of trading partners. And to maintain a neo-colonial empire to make it all happen you need to spread plenty of gravy around. Petro dollars, Euro dollars, China dollars.....there's an ocean of dollars out there and it's starting to be spent instead of saved by developing nations. The days of cheap commodities is OVER

Flakmeister's picture

  Wholeheartedly agree...

 The signs have been there for a while, e.g. decreasing average Cu grades, decreasing average API, increasing Sulfur content etc... It was only a matter of when when we reached the economic inflection point.

chumbawamba's picture


I am Chumbawamba.

RobotTrader's picture

I'm expecting that the central banks will once again assemble some type of  "dollar swap line" that will trigger another Don Coxe "Midnight Massacre" in the CRB Index.

TPTB is going to take action soon to quell the speculation in these food commodities.

Flakmeister's picture

Hey Robo, did you pick up any FRG on its recent pull back? NEM announced a friendly buyout today at $14....

Misean's picture

Well, yeah, someone's going to have to drive the hot money out of these commodities. Still, a good chunk of the price spike is supply related. Not going to be as easy as busting Goldman Sucks 2008 oil bubble...

Caviar Emptor's picture

Won't work, can't work. Supply is constrained, demand is rising. And if you lower the price temporarily and marginally with rules you know what will happen?? CHina will scoop up and stockpile on the cheap using all that ocean of dollars they have. And so will all the developing nations with all their dollars. In fact everyone will because that will be a golden opportunity. 

chumbawamba's picture

Start stripping and stockpiling the copper pipe and wire out of all those abandoned over-built homes in the extended suburbs.

Oops, too late, the tweakers beat you to it.  It's all in China already.

I am Chumbawamba.

serotonindumptruck's picture

Certainly not a tweaker, but I did obtain salvage rights on an early 20th century school-house a couple years ago. I was amazed at the amount of single gauge copper wiring in the place. Had to wear a good respirator, though. The asbestos weave on that wiring was THICK.

Anyway, not a bad payday for a couple of days worth of labor.

The real Cu salvage prizes are the old transformer coils. I'm talking upwards of 100 pounds of shiny, pristine copper. The downside is disposing of the (poly-chlorinated biphenyls) coolant. An excellent lubricant, but its persistence in the environment makes improper disposal a Federal lock-up offence.

chumbawamba's picture

I once stripped down a largish 3-phase UPS system.  It had two transformers, three coils of copper a piece (for each phase).  The coils on the larger of the two were 70+ pounds each.

Oh yes, that was a nice payday in deed ;)

I predict $10/lbs copper by this summer.

I am Chumbawamba.

serotonindumptruck's picture

Don't know why somebody would junk you.

Do I get one, too? Please?

Ms. Erable's picture

Junked not for content, but because you asked so nicely.

Mr Lennon Hendrix's picture

They do so when they raise the price of the dollar.  Unfortunately PMs follow.  But they are happy to block oil from appreciating...for now.

Robot Traders Mom's picture

Thanks for not posting one of your stupid yahoo finance charts. Also, stick with tech stock analysis. You obviously grew up in the California school system.

Mr Lennon Hendrix's picture

I thought for sure he would have JWN up by now...

ClassicalLib17's picture

Hey, you're one good looking mama there. How about we get together for a Dairy Queen Blizzard for dessert. Can't afford the whole meal as I am currently unemployed.

chumbawamba's picture

I grew up in the California school system as well (LAUSD REPRESENT!)

That explains everything.

I am Chumbawamba.

hardcleareye's picture

Good to see your keeping an eye on your boy, we appreciate it.

pods's picture

Now what were you doing emailing the Italian MP?


mynhair's picture

Lol, Ponzi oz.

gwar5's picture

I''m stocked up. I'll get more from the local Food Lion now that they're in the money losing business.

Shocker's picture

If they raise the prices, then they shrink the packaging. 90% of the companies that shrink the packaging I no longer buy from. The real losers in this battle are the people that are already struggling, this just beats them down more.

Everybodys All American's picture

Can someone just hurl a stone at Berrnanke for me.

Dr. Richard Head's picture

FAO Food Price Index Bitchez!

Quinvarius's picture

On a lizard brain level, I am a big fan of exporting our misery rather than suffering from it.

Overflow-admin's picture

I guess you were thinking of "reptilian brain level" or "primitive brain level". But is that outrageously real or creeping sarcasm?

Quinvarius's picture

I tried to answer this, but it turned into a long tract of dark self analsis.  I am now smoking a cigar, while sitting on the toilet, and talking to my mom on the phone.