World Bank sees dip in global food prices
GLOBAL food prices in 2012 are expected to decline as a result of a slow world economy and lower prices of energy and crude oil, the World Bank said in a statement on Wednesday.
But the bank added that some upward price pressures still remain such as a possible increase in need for biofuels if oil prices pick up again, very low stock-to-use levels for maize, instability in oil prices as a result of conflict in producer countries and weather changes.
Meanwhile, according to World Bank Group’s latest Food Price Watch report, between September and December of 2011 global food prices went down by 8 percent because of increasing
supplies and uncertainty about the global economy.
The report said that the global prices of key staples continued to be volatile as average annual prices of wheat, maize and rice surpassed averages for 2010.
Moreover, it added that domestic food prices also experienced sharp increases in many countries from December 2010 to December 2011.
“The worst food price increases may be over but we must remain vigilant,” the World Bank Group’s Vice President for Poverty Reduction and Economic Management Otaviano Canuto said.
Canuto added that prices of certain foods remain severely high in many countries, leaving millions of people at risk of malnutrition and hunger.
The report said that unseasonal increases in cereal prices threaten to worsen food insecurity conditions, adding that the implementation of some coping mechanisms in poor homes—from eating cheaper meals to taking children out of school— could have negative, long- lasting effects on the health and well-being of millions of families in already difficult situations.
It noted that well-targeted support such as school food programs, conditional cash transfers and foodfor-work programs are needed to help people deal with the situation.
“While the first quarter of 2011 witnessed sharp increases, five consecutive months of decreases at the end of the year drove the World Bank Food Price Index 7 percent below the December 2010 levels, and 14 percent lower than its February peak. Nevertheless, global prices remain high with the 2011 annual index averaging at 210 points against 169 points average in 2010,” the report said.