IMF 'extremely concerned' about rising food prices

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"We're extremely concerned about rising food prices in particular because of their impact on the poorest and most vulnerable wherever they are, particularly in the low-income countries but not only there," fund spokeswoman Caroline Atkinson said at a news briefing.

Asked how governments should address soaring food prices, which the United Nations reported Thursday at record highs, Atkinson stressed the importance of "well-targeted" ways of supporting those most at risk.

"It's important that people who are most vulnerable should be protected rather than products subsidized," she said.

The UN's Food and Agriculture Organisation (FAO) said Thursday its Food Price Index rose in February to the highest level since it began monitoring prices in 1990.

The FAO warned that a further rise in crude oil prices, which have soared on the back of political unrest in the Arab world, could push food prices higher.

Atkinson's comments came after European Central Bank president Jean-Claude Trichet warned Thursday about rising inflation in the eurozone and hinted of an interest rate hike next month.

Beyond rising food prices, Atkinson pointed to building inflation in some rapidly growing emerging economies.

Some emerging countries are "getting to the point of potential overheating and therefore central banks have been quite appropriately beginning to tighten monetary policy," she said, citing Brazil's monetary tightening.

Brazil's central bank on Wednesday announced its second key interest rate hike of the year, to 11.75 per cent, in a bid to tame soaring inflation.

For the advanced economies, the rise in oil prices poses a challenge, Atkinson said, adding: "There is tremendous uncertainty."

In response to a question about inflation risks in the United States, Atkinson recalled the Federal Reserve's recent steps to limit the risks of deflation as the economy struggles to recover from the Great Recession.

"Right now inflation is not a worry for the US economy," she said.