WASHIGNTO D.C (Commodity Online): The world bank food price index states that world food commodity prices have stabilised but they are 7 percent higher than last year.

Prices of grain are up 12 percent from a year ago and close to the all-time high. Global food prices remained stable though close to 2008 record levels, the World Bank said on Thursday.

Droughts in the United States corn belt and food basket regions of the Black Sea pushed up the global prices of wheat and maize this year.

Fats and edible oils still are 12 percent more expensive than a year earlier, and grains are very close to the all-time high reached in 2008 the bank said.

Weather condition, the cost of fuel and export competition will play a major role in near future in determining the prices of food commodities.

The world population will rise to 7.02 bn this year, according to the U.S. census bureau- food production. The demand for food will increase significantly as a result of growing population.

Demand for food has significantly rose in developing economies like China, India and other African countries.

Existing world food prices are directly linked to government subsidies on corn-based ethanol, which diverts corn crops to fuel for energy needs.

In an update of its quarterly 'Food Price Watch' report, the world bank said food export restrictions, higher import duties and others have helped to stabilise commodity prices since price spikes in July.

Otaviano Canuto, world bank vice president for poverty reduction and economic management has urged countries to boost investment in agriculture especially in food crops to boost food production, which would help reduce prices significantly.