(HN, February 3, 2011) -- World food prices have surged, for the seventh consecutive month, to a new historic peak in January, according to the updated FAO Food Price Index, a commodity basket that regularly tracks monthly changes in global food prices.
The index averaged 231 points in January and was up 3.4 percent from December – the highest level since the FAO started to measure in 1990 and higher than in June 2008 when the cost of food sparked violent protests in countries including Egypt, Haiti and Cameroon.
“These high prices are likely to persist in the months to come, FAO economist Abdolreza Abbassian said.
The individual group components of the index, apart from meat, all registered rises in January.
The Cereal Price Index averaged 245 points in January reflecting rises in the price of wheat and grain which had already gone up due to poor weather conditions this past year in countries such as Russia and the Ukraine and was driven higher by flooding in Australia, which is a major wheat exporter.
The high price of food seems to have been the spark that has unleashed a series of anti-government demonstrations, protests in several countries in the Middle East, beginning in Tunisia, where a young man set himself on fire after being prevented from selling fruits and vegetables, and spreading to Algeria, Yemen, Jordan and Egypt.
The Middle East and North Africa are the two regions that import the largest amount of cereal and countries in the area have been hit especially hard by the harvest shortages in Russia and the Ukraine this year.
Today the Moldovan government has decided to ban all wheat exports until the next harvest in an effort to prevent a large increase in the price of bread. The Prime Minister stated that the order should have been made earlier to avoid the “panic” that he says has already taken hold of the population.
Surging global food prices are just one of the many challenges that people face throughout the world. Climate change, growing population, and water sources are also affecting the overall food production and availability. As many countries grow increasingly dependent on food imports, they grow more vulnerable to natural disaster and market fluctuations taking place half-way around the world from them.
In India, The Financial Times reported earlier this week that food prices have hit their highest point in more than a year. Food prices are up by at least 18 percent from last year in a country where millions are spending more than 50 percent of their total income on food.
Rises are particularly high for dairy products, up 6.2% from December. Prices were driven higher by a combination of lower supply and increasing demand in emerging economies such as China and India.
The demand for food is expected to continue to grow as a result both of population grown and rising incomes according the FAO. Demand for cereals (for food and animal feed) is projected to reach some 3 billion tons by 2050. Annual cereal production will have to grow by almost a billion tons (2.1 billion tons today), and meat production by over 200 million tons to reach a total of 470 million tons in 2050, 72 percent of which will be consumed in developing countries, up from the 58 percent today.
The production of biofuels could also increase the demand for agricultural commodities, depending on energy prices and government policies.
World Bank President Robert Zoellick has asked global leaders to “put food first” and tackle the problem of price volatility.
“We are going to be facing a broader trend of increasing commodity prices, including food commodity prices”, he said.
Commodities prices have been on the rise generally with copper hitting a record high of $10,000 a ton.
Oil was also up on Thursday with Brent crude rising to $103.37 a barrel.
- HUMNews Staff