The Asian Development Bank has come up with an analysis that from June 2010-February 2011, global food prices increased by 40.4%. In January 2011, the benchmark index for food prices of the Food and Agriculture Organization (FAO) of the United Nations (UN) exceeded the steepest price level on record in 2008. The index went up by 28.4% during the month compared to the level a year ago. Food prices continued to climb, recording a year-on-year increase of 34.2%.
According to FAO, both the demand-side and the supply-side factors are responsible for the rising trend of global food prices. Demand-side factors include a growing world population, strong income growth in emerging economies, and changing diets away from staple foods toward increased consumption of meats and processed foods that require much larger proportions of food as feedstock and inputs.
On the other side, the supply-side factors include competing use of food grains, especially corn and rapeseed oil, to produce bio-fuel, urbanization and diversion of agricultural land for commercial purposes, increasing scarcity of fresh water for irrigation, low crop yields, rising input costs, and neglect of investment in agricultural technology, infrastructure, processing facilities, and agriculture research and development.