ISLAMABAD, April 25: Global food prices increased by 8 per cent from December 2011 to March 2012 due to higher oil prices, adverse weather conditions, and Asia’s strong demand for food imports, according to ‘Food Price Watch’ released by the World Bank on Wednesday.

“If current production forecasts for 2012-13 do not materialise, global food prices could reach higher levels, underscoring the need to remain vigilant and improve the monitoring of early signals of global and regional crises, Global Food Price Watch warns.

It says domestic prices remain high in many parts of the world, with the magnitude of increases typically exceeding price declines across countries.

The global food price index was only one per cent below a year ago and 6 per cent below the February 2011 historic peak. All key food prices have increased, except for rice.

According to the quarterly Food Price Watch report, prices of all key staples increased between last December and March of this year, except for rice, due to both abundant supply and strong competition among exporters.

Maize prices increased by 9 per cent, soybean oil by 7 per cent, wheat by 6 per cent, and sugar by 5 per cent.

Crude oil prices rose by 13 per cent.

Production outlooks remain strong for 2012-13 and a number of factors have kept pressures on prices at bay.

Record prices in late 2010 and early 2011 led to increased production of major crops worldwide, and are a key factor in the strong projections for the 2012-13 season.

The World Bank notes that there exists no generally-accepted comprehensive mechanism to identify the onset of a global food crisis, and to bridge this gap, it was currently developing a monitoring framework which defines, identifies, and monitors food price crises at both global and national levels.

This framework will focus on global prices and will not directly include other factors that are also relevant from a point of view of global food security crises, such as food access, distribution, and regional and country specific vulnerabilities.

Commenting on the increase in food prices, World Bank Vice President for Poverty Reduction and Economic Management, Otaviano Canuto notes that “after four months of consecutive price declines, food prices are on the rise again threatening the food security of millions of people.”

The announced EU embargo and US sanctions on companies dealing with Iranian banks will be implemented in July this year, putting pressure on European and Asian buyers to identify alternative sources of oil.