The World Bank said Tuesday food prices have hit "dangerous levels" that could contribute to political instability, push millions of people into poverty and raise the cost of groceries.

The bank's president, Robert Zoellick, said in Washington rising prices have hit people hardest in the developing world because they spend as much as half their income on food.

Activists shout slogans as they protest against high food prices on Monday in Calcutta, where inflation is running at more than eight per cent. (Bikas Das/Associated Press)

The bank, in a report released Tuesday, said that global food prices have jumped 29 per cent in the past year, and are just three per cent below the all-time peak hit in 2008.

On Feb. 3, the UN's Food and Agriculture Organization said prices are already there.

Its food price index rose in January by 3.4 per cent from December to 231 points. The rise was the seventh straight monthly increase.

The index measures monthly price changes for a basket of foods including cereals, oilseeds, dairy, meat and sugar.

High prices sparked rioting in 61 countries in 2007 and 2008. Back then, the FAO index was at 200 points for all of 2008.

Wheat prices have traded at record levels recently as commodity traders worry about the quality and quantity of the global wheat supply, given continuing drought in China, and after devastating floods damaged Australia's crop. Last year, yields were affected by drought in Russia and Ukraine and by flooding in Canada.

Wheat futures for May delivery retreated by 3.8 per cent Tuesday, to $8.70 a bushel on the Chicago Board of Trade. A day earlier, the price touched $9.15 a bushel, its highest since Aug. 22, 2008.

The World Bank, in its report Tuesday, estimated higher prices for corn, wheat and oil have pushed 44 million people into extreme poverty since last June.

Zoellick said he expects food prices to continue to rise, and that export bans and weather disruptions are partly to blame.

Food inflation is among the factors blamed for the turmoil in Egypt and Yemen and the overthrow of Tunisian president Zine El Abidine Ben Ali.

With files from The Associated Press