Friday, April 15, 2011

World Bank says food prices have jumped 36 percent in a year

The World Bank has issued another warning about rising food prices. The Bank's latest analysis of food prices finds that they have have jumped 36% since April of last year.

That increase in food prices has pushed another 10 million people below the poverty line. For those who used to be on the edge of poverty any rise in food price could drop them below because a majority of their budget is spent on food. That percentage could be as much as 75% or more for a family that only makes one or two dollars a day.

From the Guardian, writer Phillip Inman gives us some of the details of the food price survey.

Food producing countries must relax export controls and divert production away from biofuels to prevent millions more people being driven into poverty by higher food prices, the head of the World Bank Robert Zoellick said in Washington.

Higher transport and fertiliser costs have sent the price of wheat, maize and soya back to levels last seen in the price boom of 2008.

"More poor people are suffering and more people could become poor because of high and volatile food prices," Zoellick said. "We have to put food first and protect the poor and vulnerable, who spend most of their money on food."

He was speaking before the IMF and World Bank meetings later this week, which will be attended by finance ministers and central bankers including the chancellor of the exchequer, George Osborne, and Bank of England governor Mervyn King.

A further 10% increase in food prices could drive an additional 10 million people below the poverty line, while a repeat of the last year's increases would affect 34 million who are already close to the poverty line.

Some analysts have argued that a slowdown in global growth will bring food prices down from their recent peaks.

Goldman Sachs said in a recent note that oil prices would begin to drop, along with other commodities.

In recent days oil prices have slipped from a high of $127 to $120. But rival analysts remain concerned that oil prices will continue their long upward path, albeit with a few blips along the way.

The World Bank's food price index found that several key foods for developing countries shot up last year, including maize by 74% and wheat by 69%, though rice prices have been stable.

No comments: