Food prices around the world are heading higher as a result of the devastating drought in the U.S. this year and water shortages in major farming areas of Russia and South America.
Analysts at Rabobank, which specializes in agricultural commodities, say the effects will unfold for a while. In particular, global food prices are expected to hit a record high in the first quarter of 2013 and keep climbing from there. By June 2013, prices could be 15 percent higher than current levels.
“The coming year will see the world economy re-enter a period of ‘agflation’ as grain and oilseed stocks decline to critically low levels, pushing the United Nations’ FAO (Food and Agricultural Organisation) Food Price Index above record nominal highs set in February 2011,” warned Rabobank analysts.