* FAO food price index up 1.4 pct to 216 points in Sept
* FAO economist expects prices to stay high, volatile
* FAO slightly cuts global cereals output forecast
By Catherine Hornby
ROME, Oct 4 World food prices rose in September
and are seen remaining close to levels reached during the 2008
food crisis, the United Nations' food agency said on Thursday,
while cutting its forecast for global cereal output.
The worst drought in more than 50 years in the United States
sent corn and soybean prices to record highs over the summer,
and, coupled with drought in Russia and other Black Sea
exporting countries, raised fears of a renewed crisis.
Grains prices have retreated in recent weeks due to rapid
harvest progress and concerns about weak demand in a slowing
But the Food and Agriculture Organisation's (FAO) price
index, which measures monthly price changes for a food basket of
cereals, oilseeds, dairy, meat and sugar, rose 1.4 percent to an
average of 216 points in September after remaining stable at 213
points in August.
The rise reflected mainly higher dairy and meat prices, with
more contained increases for cereals, it said.
"Prices are remaining high... prices are sustained, it's
highly unlikely we will see a normalisation of prices anytime
soon," FAO senior economist Abdolreza Abbassian told Reuters in
a telephone interview.
He added however that it was not clear whether the small
increase in September meant prices were now on an upward trend,
but he expected volatility in markets could intensify in coming
Parmjit Singh, head of the food and drink sector at law firm
Eversheds, said higher prices would place further pressure on
squeezed international food supply chains.
"Manufacturers and producers will naturally want to pass on
increased costs to their clients but they will meet with stiff
resistance from retailers who are reluctant to increase checkout
prices for increasingly value-conscious customers," Singh said.
FAO's index is below a peak of 238 points hit in February
2011, when high food prices helped drive the Arab Spring
uprisings in the Middle East and North Africa, but current
levels are very close to those seen in 2008 which sparked riots
in poor countries.
The Rome-based agency said it had cut its 2012 world cereals
output forecast by 0.4 percent to 2.286 billion tonnes from a
previous estimate of 2.295 billion tonnes, mainly due to a
smaller maize crop in central and southeastern parts of Europe,
where yields have been hit by prolonged dry conditions.
It also decreased its forecast for world cereal stocks at
the end of the 2013 season to 499 million tonnes, down 4 million
tonnes from its projection last month.
Despite the rise in food prices, the United States Mission
to the UN Agencies in Rome said on Thursday it had agreed with
other countries that a meeting of the emergency Rapid Response
Forum to discuss food prices under the G20 agriculture body AMIS
was not necessary.
"Agricultural commodity markets are functioning," the
Abbassian said a ministerial meeting on the food market
situation was still planned for Oct 16.
Aid agency Oxfam called on governments to tackle the root
causes of food price volatility at the meeting.
"They need to boost food reserves and strengthen social
protection programmes for populations that are at risk of
hunger," Oxfam spokesman Colin Roche said in a statement.
"We cannot afford to sleepwalk into the next food crisis."
French President Francois Hollande has launched a global
campaign to win support for strategic stocks of agricultural
commodities, but EU development Commissioner Andris Piebalgs
said this week that was not the best way to tame food prices,
advising a focus on agricultural investment to boost production.