Global food prices increased by 8 percent from December
2011 to March 2012 due to higher oil prices, adverse weather conditions,
and Asia’s strong demand for food imports, according to the World Bank
Group’s latest Food Price Watch.
The
World Bank’s Global Food Price Index was only 1 percent below a year
ago and 6 percent below the February 2011 historic peak. If the current
forecasts for increased food production do not materialize, global food
prices could reach higher levels, underscoring the need to remain very
vigilant.
“After
four months of consecutive price declines, food prices are on the rise
again threatening the food security of millions of people,” said Otaviano Canuto, World Bank Vice President for Poverty Reduction and Economic Management (PREM). “Putting food first must remain a priority for the international community and in our work in developing countries.”
According to the quarterly Food Price Watch
report, prices of all key staples increased between last December and
March of this year, except for rice, due to both abundant supply and
strong competition among exporters. Maize prices increased by 9 percent,
soybean oil by 7 percent, wheat by 6 percent, and sugar by 5 percent.
Crude oil prices rose by 13 percent.
In
addition, domestic food prices remain high, especially in Africa as the
result of a combination of large food imports and local factors, such
as trade restrictions between neighbors, hoarding, civil unrest, high
fuel transportation costs and bad weather conditions.
In a global context, domestic food price increases have been larger than price declines across countries.
Wheat prices from March 2011 to March 2012 rose 92 percent in Belarus,
while the price of maize increased by 82 percent in Malawi, 80 percent
in Ethiopia, and 71 percent in Mexico.
Production
outlooks remain strong for 2012/13 and a number of factors have kept
pressures on prices at bay. Record prices in late 2010 and early 2011
led to increased production of major crops worldwide, and are a key
factor in the strong projections for the 2012/13 season. The slowdown in
maize use for ethanol production in the U.S. and weak global demand due
to the euro crisis are contributing to keeping upward price pressures
on check.
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