FAO sees Jan food prices close to record highs

MILAN Mon Jan 31, 2011 5:08am EST

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MILAN Jan 31 (Reuters) - World food prices in January are expected to be close to record highs seen in December, an economist at the United Nations' food agency said on Monday ahead of the release of the agency's monthly food index.

"FAO's expectation is that the January index would be very close or slightly below December," Abdolreza Abbassian, UN's Food and Agriculture Organisation (FAO) economist, told Reuters in a telephone interview.

The FAO Food Price Index, which measures monthly price changes for a food basket composed of cereals, oilseeds, dairy, meat and sugar, hit a record high of 214.7 points in December, above 2008 peaks which triggered riots in several countries.

According to preliminary estimates, prices of sugar, some grains and oilseeds in January were slightly below levels seen in December, Abbassian said adding the FAO uses spot and physical prices to calculate the index and does not use futures prices.

The FAO is due to publish its Food Price Index for January on Feb. 3. (Reporting by Svetlana Kovalyova; editing by James Jukwey)

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