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World Bank: Food prices on the rise again

Apr 25 2012 17:33 Reuters

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Washington - Global food prices are rising again, pushed higher by costlier oil, strong demand from Asia and bad weather in parts of Europe, South America and the United States, the World Bank said on Wednesday.

The latest World Bank food price index showed the cost of food rose 8% between December and March. In the previous four months, prices had declined.

Even after the latest rise, food prices remain 1% below a year ago and 6% below the February 2011 historical peak, the World Bank said.

“After four months of consecutive price declines, food prices are on the rise again, threatening the food security of millions of people,” Otaviano Canuto, World Bank vice-president for poverty reduction and economic management, said in a statement.

“The price indices of grains, fats and oils, and other foods all increased in each month since January 2012,” the World Bank said.

The international rice price declined, however, due to abundant supplies of the grain and strong competition among exporters, the poverty-fighting institution said.

If current food production forecast for 2012/2013 do not materialise, global food prices could reach higher levels and required close monitoring, the World Bank cautioned.

Developing economies were hit by a food and energy price crisis in 2008/09, sparking social unrest and food export bans in some countries.

Further price increases in 2010 and early 2011 led to increased production of major crops, the bank added.

It said production outlooks remain “strong” with price pressures influenced by a decline in the use of maize for ethanol production in the United States and weaker global demand due to the eurozone debt crisis.

Domestic food prices remain high especially in Africa due to a combination of large food imports and factors such as regional trade restrictions, hoarding, civil unrest and bad weather.

The World Bank said it is hard to predict whether the surge in prices this year would lead to a new global food crisis, since there is no mechanism to identify the onset of a global food crisis.

The bank said it is working on developing a system to define, identify and monitor food price increases at global and national levels.
world bank  |  inflation  |  food prices
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