Sat, Feb 05, 2011 - Page 5 News List

Food prices hit historic peak, UN report says

PROTEST TRIGGER:The FAO, which checks monthly changes in global food prices, said the food price index last month reached the highest level since 1990

AP, ROME

A homeless man sleeps in a concrete pipe at Manila’s Divisoria market in the Philippines, yesterday. One-third of Philippine schoolchildren are stunted because poverty has forced them to eat too little food for years, according to a government study released this week. The Philippines’ annual inflation rate jumped last month as food costs rose.

Photo: AFP

A UN agency reported on Thursday that world food prices have reached a historic peak, but good harvests are for now forestalling the kind of food emergency felt in many places in 2008.

Rising food prices have been among the triggers for protests in Egypt, Algeria and elsewhere.

“What is happening in northern Africa seems to be more political in nature,” Food and Agriculture Organization (FAO) economist and grain expert Abdolreza Abbassian said. “Of course, we cannot ignore the food inflation as one of the elements of discontent.”

The FAO said its food price index was up 3.4 percent in December from a month earlier — the seventh straight month of world food price increases.

“What will probably be identified as a major difference is the duration of the rise. It has been a long one, accompanied by strong volatility,” Abbassian said.

However, he said the situation is “moderately more comfortable” than the crisis of 2008, because of strong harvests, which potentially “can help countries carry on until hopefully world markets settle down to normal levels.”

Still, OXFAM said the FAO index “should ring alarm bells in capitals around the world.”

“Good harvests are offsetting the worst for many, but if prices remain high, it will be just a matter of months before the world’s poor are hit by another major food price crisis,” Chris Leather, policy adviser for development organization OXFAM, said in a statement. “Governments need to act now and act together to stop the rot.”

He called on G20 finance ministers meeting later this month in Paris to ensure commodity prices are more transparent and urged governments to avoid the mistakes of 2008, when spiraling prices led to export bands and hoarding.

During the 2008 crisis, the world’s biggest rice producers, Thailand, Vietnam and India, curbed rice exports to protect domestic supply, leading to record high prices. The number of hungry then reached 1 billion.

This time around, rice, one of the world’s most important staples, is priced 50 percent below 2007 levels, and also below last year’s.

The FAO said the food price index last month reached 231 points, the highest level registered since 1990, when the agency started monitoring prices. The index regularly checks monthly changes in global food prices, looking at cereals, fats, dairy, sugar and meat prices. Only meat prices remained stable.

Among the factors driving up prices were a weak US dollar, which boosted commodity prices across the board, and a strike in Argentina that has blocked exports of both corn and soy beans.

Another issue is uncertainty about winter harvests in the northern hemisphere, in particular the US, a large swathe of which has been hard hit by winter storms.

“There has been a combination of information, none of it very comforting, that characterized the month of January,” Abbassian said.

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