Food prices dip but still a worry, says World Bank

Global prices remain 19% higher than in Sept 2010 despite 5% fall from Feb 2011 peak
Food prices dip but still a worry, says World Bank
Robert Zoellick, president, World Bank
By Andy Sambidge
Wed 02 Nov 2011 05:25 PM

Global food prices remain high and volatile, hitting the poorest countries hardest and adding to the strains facing the global economy, according to the World Bank Group’s new Food Price Watch.

While its food price index has dropped five percent from its February peak and dipped marginally in September by one percent, it remains 19 percent above its September 2010 levels, the World Bank said in a statement.

“The food crisis is far from over,” said World Bank Group president Robert B Zoellick, who has urged the G-20 to put food first.

“Prices remain volatile and millions of people around the world are still suffering. The World Bank has been working closely with the French Presidency of the G-20 and our partner international organisations on actions to protect the most vulnerable from the dangers of food price volatility, while also addressing some of its root causes."

The Group of 20 heads of government, who are meeting in Cannes later this week to discuss the global economy, are expected to endorse a package of actions to improve transparency and to get food to the needy fast through emergency regional humanitarian food reserves and agreement not to ban exports of food for World Food Programme.

According to Food Price Watch, recent floods in Thailand may add uncertainty in the short run following estimated production losses of between 16 to 24 percent of total production.

In the meantime, the food crisis in the Horn of Africa continues, affecting over 13.3 million people in the region–an additional million since August, and the outlook remains frightening.

The report said prices of grains rose 30 percent compared to September 2010, with maize increasing by 43 percent, rice by 26 percent and wheat 16 percent.

Soybean oil went up by 26 percent. Over the last quarter, however, an increase of three percent in the price of grains was roughly offset by a three percent decline in the prices of fats and oils.

Volatility, which is higher in low income countries, is expected to persist in the medium term due to multiple global and domestic factors, the World Bank said.

It added that a favourable outlook on supply and stocks is likely to relieve some of the pressure on global food prices.

Latest forecasts show global wheat stocks reaching a 10-year high in 2011-12, global production of maize to rise by four percent from increased production in Argentina, Brazil, China, Russia, and Ukraine.

Global rice output is also likely to get a boost in 2011-12 due to an expected bumper harvest in India following very favorable monsoon rains.

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