ROME, Aug. 9 (Xinhua) -- The FAO Food Price Index, which measures monthly price changes for a food basket of cereals, sugar, oilseeds, meat and dairy, averaged 213 points in July, up 6 percent from 201 points in June, the organization said Thursday.
The sharp rebound, which follows three months of decline, was driven mainly by a surge in grain and sugar prices, while meat and dairy prices were little changed, the United Nations food agency said in a report Thursday.
Although below a peak of 238 points in February 2011, the Index is still higher than during the world food price crisis in 2007-2008.
The FAO Cereal Price Index averaged 260 points in July, up 17 percent from June. That was only 14 points below its all-time high of 274 points in April 2008.
The severe deterioration of maize crop prospects following the historic drought damage in the United States, the world's largest corn producer, pushed up maize prices by almost 23 percent in July.
International wheat quotations also surged 19 percent amid worsened production prospects in Russia and expectations of firm demand for wheat as feed because of tight maize supplies.
However, rice prices remained mostly unchanged in July, with the FAO overall Rice Price index stable standing at 238, barely one point above June. < Analysts say it's still too early to tell if cereal prices have peaked.
"The market is still figuring out. Prices will further go up if we have worse information of the drought in August," Ryland Maltsbarger, director and principal economist with IHS Agriculture Services, told Xinhua.
The market will have a clearer picture in September and October, but prices of soft commodities will likely remain relatively high for the rest of this year, he said.
According to the Chicago Mercantile Exchange, prices of corn, wheat and soybeans (CWS) have surged 33.5 percent, 42 percent, and 15 percent respectively on growing supply concerns since June 11.
"By the end of 2012, the CWS prices can further hike by 10 percent from current high ground if the drought continues to worsen while the U.S. dollar remains stable," Maltsbarger said.
July also saw a sharp increase in the FAO Sugar Price Index, which leaped 12 percent, or 34 points, from June to a new level of 324 points.
The upturn, ending a steady fall since March, was triggered by untimely rains in Brazil, the world's largest sugar exporter, which hampered sugarcane harvesting, and by concerns over India's delayed monsoon and poor rains in Australia.
In contrast, the FAO Meat Price Index averaged 168 points in July, down 1.7 percent from June, the third consecutive monthly fall. Dairy prices averaged 173 points, unchanged from June, after five straight months of decline.