Unilever, the consumer goods firm whose brands include Flora and Persil, today warned that more price rises were on the horizon as it struggled to digest rocketing commodity prices.

Its chief executive, Paul Polman, said foods made with edible oils such as margarine and salad dressings would be hardest hit. The price of palm oil and sunflower oil has risen by 75% and 60% respectively in the last year.

Crude oil was also up 40%, he said, which pushed up the cost of bottling products such as Timotei shampoo or Domestos bleach. "We continue to live in volatile times but the business is in significantly better shape than it was two years ago," he said, blaming the poor harvests caused by flooding and other unforeseen weather events such as Cyclone Yasi.

His comments came as the Food and Agriculture Organisation of the UN said world food prices had surged to a record high in January, for the seventh consecutive month. Its food price index was up 3.4% from December to the highest level since the organisation started measuring food prices in 1990.

Cereal prices were up 3% from December and the highest since July 2008, but still 11% below their peak in April 2008. Rising wheat prices are one factor that triggered the unrest in Egypt, and the protests in Tunisia. Egypt is the world's largest wheat importer.

Polman said commodity markets were a concern but said the situation was not yet as grave as during the 2008 financial crisis, when the oil price approached $150 a barrel. "At that time Lehman Brothers was collapsing and economies were grinding to a halt. Today most countries are showing growth."

The Anglo-Dutch Unilever group has been steaming ahead in emerging markets such as Brazil, India and China but until recently had been struggling in Europe. Polman said he had a frank exchange with the European council president, Herman Van Rompuy, at the World Economic in Forum at Davos last week, as he was concerned the region was losing its competitive edge: "Europe is already happy when it shows some growth but that is a complacency that will kill it. A European internal market still doesn't exist. You still have to register your patents in every European country."

Unilever surpassed City forecasts with a 5.1% rise in underlying sales for the fourth quarter, but analysts were worried about the impact higher input prices were having on its profit margins, which are already showing signs of strain.

The company plans to cut costs by at least €1bn this year to help mitigate rising raw material costs. Its shares closed down 20p at £18.37. Investec analyst Martin Deboo said: "With Unilever struggling for margin in the face of what we think are only the foothills of input cost inflation, we expect even bigger challenges when it faces the peaks to come."