Soaring Food Prices Cause Concern Worldwide (Report)

(PHOTO: Bikyamasr.com)(HN, January 6, 2011) - Noah commandeers his battered taxi through the early morning haze of Nigeria’s capital, Abuja, wondering how he will come up with the money to pay for a trip to the market. Not only has the price of produce shot up in recent months, the price of parking at the market has double in recent weeks.

Noah’s worries were confirmed this week by the UN’s Food and Agricultural Organization (FAO), which reported that its food price index – a basket tracking the wholesale cost of wheat, corn, rice, oil seeds, dairy products, sugar and meats, has jumped to a record high – even surpassing prices that sparked riots in more than 30 countries – including Haiti, Somalia and Cameroon - in 2007-2008.

While the price of staples such as rice and wheat are below the crises level, sticker shock in markets around the world is being caused by corn, sugar, meat and vegetable oil.

“We are entering a danger territory,” Abdolreza Abbassian, an economist at the FAO told reporters Wednesday.

(GRAPH: FAO) But some believe the world food supply is more fragile than it ever was, mostly because of extreme weather worldwide last year. Major wheat producers such as Ukraine and Russia have banned exports of wheat in 2010 after extremely poor harvests. And recent severe flooding in Australia’s agricultural heartland of Queensland is already having global repercussions on the world food supply.

This week, young people in the capital of Algiers, Algeria, rioted mostly because of rising food prices – including oil, sugar and flour.

There is also evidence to suggest that in the poorest countries, mothers are being forced by rising prices to cut back on essentials. In Niger - where one in four children die before their fifth birthday, mainly due to malnutrition – record numbers of children are being admitted to the country’s 822 therapeutic feeding centres, according to UNICEF.

Even in developed countries, people in the food business are being forced to cope using innovative means. Cynthia Thomet, co-owner of Atlanta’s Lunacy Black Market, a trendy eatery, said fluctuating prices of produce means much more frequent menu changes.

The sharp increase in commodity prices has prompted food companies like General Mills, Kraft, Sara Lee, Kellogg and ConAgra Foods to drop discounts and start rising prices on many products, said Canada’s Globe and Mail newspaper.

According to the FAO not only is their Food Price Index which tracks 55 commodities in total at a record high, but December 2010 was the sixth month in a row of surging prices - the highest since records began in 1990. The organization says it fears that prices will continue to soar in coming months as supply will fall short of world demand.

(PHOTO: City Farmer)Additionally, in a continuing to struggle world economy rising food prices would see consumers left with less money for discretionary spending on things like eating out and retail items as every day eating becomes more expensive.

Compounding the issue is the growing global population, scheduled to top 7 billion people sometime this spring.  The FAO has previously warned that worldwide food production must rise by 70% by 2050 when the global population will increase to 9.1 billion people, mostly in Asia and Africa.

--- By HUMNEWS’ staff