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Food Price Spike Causes Crisis Warning

(c) Sky News 2012

Food prices across the world rose by 6% in July, fuelling concerns over a new food crisis.

The Food and Agriculture Organisation of the United Nations (FAO) warned there is a risk countries could start to impose export bans amid the price hikes.

The UN agency said grain and sugar costs have climbed as extreme weather has driven global food prices up.

In the US alone, widespread drought continues to damage corn crops, which according to the organisation's food price index pushed the cost of maize up by 23%.

The index which measures the monthly change in international prices of a basket of food commodities also showed the cost of cereal rose by 17% and sugar was up by 12%.

The July increases follow a three month decline, which was broken by heavy rain across Brazil, the world's biggest sugar exporter, which hindered sugarcane harvesting.

Responding to the FAO figures Oxfam said it was a "global alarm" and called on governments across the world to tackle spiking food prices that are causing people in developing countries to go hungry.

Oxfam's head of economic justice policy, Hannah Stoddart said in a statement: "These latest figures prove yet again that there is something fundamentally flawed in the way we produce and distribute food around the world."

She (SNP: ^SHEY - news) added: "For too long our leaders have stood by complacently, while up to a billion people go hungry worldwide."

The FAO is tasked with reducing world hunger at a time of near-record high food prices.

It comes as the cost of tea soared to a two and a half year high following poor weather in Kenya and warnings that the price of cocoa is also set to go up.

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