Global food prices stable but still high: World Bank

Saturday, 1 December 2012 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Global food prices remained stable, though close to 2008 record levels, the World Bank said on Thursday, as it warned that a ‘new norm’ of costlier food was setting in and threatening to increase hunger and malnutrition in the world’s poorer regions.

In an update of its quarterly ‘Food Price Watch’ report, the World Bank said the absence of ‘panic policies’, such as food export restrictions, had helped stabilise commodity prices since price spikes in July.

“Even as the world seems to have averted a global food price crisis, a growing sense of a ‘new norm’ of high and volatile prices seems to be consolidating,” the World Bank said. “The world cannot afford to get used to or be complacent with high and volatile food prices.”

The World Bank food price index shows that while prices have stabilised they are 7% higher than a year ago.

In particular, grains are up 12% from a year ago and close to the all-time high set during a global food price crisis in 2008, when food riots broke out in Asia and Africa.

The worst droughts in more than half a century 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, at a time that the world economy was slowing and Europe has been engulfed in a debt crisis.

On 8 November, the Rome-based UN Food and Agriculture Organisation said its food index, which measures monthly price changes for a basket of cereals, oilseeds, dairy, meat and sugar, averaged 213 points in October, down two points from the reading in September.

UN agencies have estimated that some 870 million people are chronically malnourished. Eradicating hunger is one of the eight, UN Millennium Development Goals (MDG) to reduce global poverty.

The World Bank urged governments to strengthen safety nets for the poorest and ensure that nutrition was factored into the help given to poor households.

“More resources, better data and sound policy choices continue to be needed to end hunger for the world’s 870 million hungry people,” the Bank said.

World Bank vice president for poverty reduction and economic management Otaviano Canuto also urged countries to boost investment in agriculture to increase food production, which would help reduce prices.

The World Bank and other development lenders have increased financing for agriculture in developing countries, a sector that had long suffered from under investment. The 2008 food price and energy crisis, however, highlighted the need for more investment in food production.

A swelling middle class in fast-growing emerging economies like China has added to rising demand for more food supplies.