An impending food crisis could see escalating prices and shortages in many countries as the cost of staple foods and vegetables reached their highest levels in two years, with scientists predicting widespread droughts and floods.
Although food stocks are generally good after a year that saw harvests wiped out in Pakistan and Russia, sugar and rice are at their highest price levels. Global wheat and maize prices recently jumped nearly 30 percent in a few weeks.
Global meat prices are at 20-year highs and last week the US predicted that global wheat harvests would be 30 million tonnes lower than last year. Meanwhile, the price of tomatoes in Egypt, garlic in China and bread in Pakistan are at near-record levels.
“The situation has deteriorated since September,” said Abdolreza Abbassian of the UN Food and Agriculture Organization.
“In the last few weeks there have been signs we are heading the same way as in 2008,” he said. “We may not get to the prices of 2008 but this time they could stay high much longer.”
However, opinions are sharply divided over whether these prices signal a world food crisis like the one in 2008 that saw riots in 25 countries, or simply reflect volatility in global commodity markets as countries claw their way through recession.
“A food crisis on the scale of two or three years ago is not imminent, but the underlying causes [of what happened then] are still there,” said Chris Leather, Oxfam’s food policy adviser. “Prices are volatile and there is a lot of nervousness in the market. There are big differences between now and 2008. Harvests are generally better, global food stocks are better.”
Others point to food riots in Mozambique that killed 12 people last month and say prices could spiral and lead to political turmoil. They say this is particularly possible if the price of oil jumps, if there are further climatic shocks — like the floods in Pakistan or the heat wave in Russia — or if speculators buy deeper into global food markets.
“There is growing concern among countries about continuing volatility and uncertainty in food markets,” World Bank president Robert Zoellick said. “These concerns have been compounded by recent increases in grain prices. World food price volatility remains significant and in some countries, the volatility is adding to already higher local food prices.”
The bank last week said that food price volatility would last another five years, and asked governments to contribute to a crisis fund after requests for more than US$1 billion from developing countries were made.
In the last month, the governments of Kenya, Uganda, Nigeria, Indonesia and the Philippines have all warned of possible food shortages next year, citing floods and droughts this year, expected extreme weather next year and speculation by traders who are buying up food stocks.
World wheat and maize prices have risen 57 percent, rice 45 percent and sugar 55 percent in the last six months and soybeans are at their highest price for 16 months.
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