World food prices measured by the United Nations' food agency are likely to rise for the second straight month in February on the back of strong grain and vegetable oil prices, adding to inflation concerns.
Food prices hit record highs in February 2011 helping to stoke the unrest of the Arab Spring and grabbing international headlines. Prices have fallen since then but their unexpected upturn in January fuelled concerns about rising inflation.
The UN Food and Agriculture Organisation (FAO) will update its monthly Food Price Index on Thursday, just as the European Central Bank meets and is widely expected to keep interest rates unchanged at 1.0% after recent cuts.
Euro zone inflation rose slightly to 2.7% in February driven by increasing oil prices and feeding expectations the ECB is likely to put off any quick decision to bring interest rates below 1%.
The FAO index - which measures price changes for a basket of cereals, oilseeds, dairy products, meat and sugar - rose in January snapping a six-month downtrend and the FAO has suggested prices could rise again in February helped by high energy prices.
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Grain prices on the physical markets rose last month, with the average monthly price of benchmark US maize (corn) rising to $278.26 a tonne from $273.44 a tonne in January and Thai rice jumping to $563.25 a tonne from $547.50 a tonne, the FAO's database showed.
US Hard Red Winter wheat edged higher to $297.25 a tonne in February from $296.50 a tonne in January, while US soybeans jumped to $487.31 a tonne from $462.16 a tonne, according to the database.
On the Chicago Board of Trade, soybean futures rose more than 9% in February in the largest monthly gain since December 2010 and corn rose about 2.5% on the month helped by weather concerns, export demand and investment fund buying, while wheat was flat.
Sugar futures also rose in February.
The FAO is also expected to update its world crops view on Thursday.