Food prices reach highest levels in nearly seven years: FAO

World food prices rose by 2.1 percent in March, reaching levels last seen in June 2014, the United Nations Food and Agriculture Organization (FAO) reported on Thursday.

Grains and cereals, the largest component in the index, fell 1.7 percent for the month, ending an eight-month rising trend. But the sub-index was still 26.5 percent higher than a year earlier. Wheat, corn, barley, and rice prices all fell, though FAO said the decline was limited by strong demand from China and India.

Sugar prices also fell, slipping 4.0 percent compared to February, though they remained more than 30 percent above levels from a year earlier, FAO said.

But those declines were not enough to offset increases elsewhere, as all the other sub-indexes saw prices climb.

Dairy prices were 3.9 percent higher for the month, pushed by transport issues in Europe and North America, and increased demand for milk powder in Asia, most notably from China.

Meat prices, meanwhile, rose 2.3 percent on the back of increased demand for poultry and pork, while prices for vegetable oils surged 8.0 percent, reaching their highest level since 2011.

The monthly FAO Food Price Index is based on worldwide prices for 23 food commodity categories covering 73 different products compared to a baseline year.