By Kathryn McConnell
Global food prices are 36 percent higher than they were a year ago and remain volatile, the World Bank reports.
Food price levels are close to their peak in 2008, the bank reports in the latest edition of its Food Price Watch.
High and volatile food prices are “the biggest threat” to the poor around the world, said World Bank President Robert Zoellick. “Already 44 million people have fallen into poverty since June of last year,” he said at a press conference after the release of the report April 14.
Data from 46 countries for 2007 through 2010 suggests that low and low-middle income countries experienced greater food inflation than higher income economies, according to the report.
Maize had the greatest price increase, spiking 74 percent from 2010. Wheat increased 69 percent from a year ago, soybeans went up 36 percent and sugar increased 21 percent. Rice prices remained stable.
A key difference from the price spike in 2008 is that the more recent surge is more broadly based across food groups. Some countries have seen sizeable price increases in nongrain food items essential for balanced nutrition, including fruits, vegetables, meat and cooking oil.
Several factors have driven food prices higher. Those include curtailed supplies because of weather shocks in the key grain-exporting countries of Russia, Kazakhstan, Canada, Australia and Argentina. Other factors include more competition for land and the use of maize, vegetable oil and sugar in the production of biofuels. In addition, crude oil prices have risen 36 percent from a year ago. Higher incomes in growing economies mean people are eating more meat, which increases feed prices. At the same time, global commodity stocks are at an all-time low, according to the report.
Issues related to food-price volatility will be a key topic as global leaders gather for the annual World Bank and International Monetary Fund spring meetings April 16–17 in Washington, Zoellick said.
Zoellick suggested the meetings can be used to prepare a new “code of conduct” for countries’ grain-export bans. “At a minimum, these should not apply to humanitarian suppliers like the World Food Programme.”
He said the World Bank and regional development banks can help countries best by providing quick support to vulnerable populations through targeted nutrition programs, rather than with price controls or broad-based wage increases.
The report also recommends relaxing biofuel mandates when food prices exceed a certain level to reduce demand for the raw materials used in producing the fuels.
In the short term, Zoellick said, the World Bank’s Global Food Crisis Response Program is investing $1.5 billion in improved seeds, irrigation and storage systems for some 40 million vulnerable people in 44 countries. Longer term, he said, the bank is boosting its spending on agriculture from $4.1 billion a year in 2008 to $7 billion a year.
“As the hunger clock on the front of our building shows, there [are] nearly 1 billion undernourished people on our planet and the number is increasing by 68 people every minute,” Zoellick said.
“We have to put food first and protect the poor.”
Food Price Watch is available on the World Bank’s website.
(This is a product of the Bureau of International Information Programs, U.S. Department of State. )Photo by flickr.com/photos/35706082@N03