World Bank Highlights Significant Food Price Rises

“Rising food prices pushed tens of millions of people into extreme poverty last year and are reaching ‘dangerous levels’ in some countries, World Bank President Robert Zoellick said Tuesday as he released new data showing that the cost of grain and other staples is near a historic high,” the Washington Post reports (Schneider, 2/15). About 44 million people in developing countries have been pushed into poverty because of food prices that have risen since June, according to information from the bank, which was released ahead of the G20 meeting of finance ministers and central bank heads, a World Bank press release states (2/15).

Zoellick added that rising food prices were an “aggravating factor” in the demonstrations in Tunisia, Egypt and other countries, the Washington Post writes. The bank president “urged major nations to collaborate on ways to temper the rapid price swings that can lead to shortages in the economically weakest nations and prompt others to stockpile grain or restrict exports” (2/15).

The bank “said its food price index increased by 15 percent between October 2010 and January 2011 and is just 3 percent below its 2008 peak during the last food price crisis,” Reuters reports (2/15). “Among grains, global wheat prices have risen the most, doubling between June 2010 and January 2011,” according to the press release. The bank’s index also shows that the “increase in extreme poverty (under $1.25 a day) due to the price hike is associated with higher malnutrition, as poorer people eat less and are forced to buy food that is both less expensive and less nutritious” (2/15).

“The bank said that fewer people had fallen into poverty than in 2008 because of two factors – good harvests in many African countries had kept prices stable, and the increases in rice prices – a key part of the diet for many of the world’s poor – had been moderate,” the Guardian notes (2/15). “Across Asia and in some parts of Latin America and Eastern Europe countries, costlier food is pushing up inflation pressures, while good harvests of staple foods in Sub-Saharan Africa has so far spared that region from rising prices,” Reuters adds (2/15).

News Outlets Looks At Food Price Volatility Effects Worldwide

A second Reuters article looks at how Asian countries are coping with the increasing cost of food. In an interview, John Roome, the World Bank’s director of sustainable development in the East Asia and Pacific region, said, “Our sense is that countries are aware of the issues. They are taking steps to manage the inflationary pressures. But they are trying to balance other issues at the same time.”

“Asia has faced some of the highest food inflation in the world, prompting some central banks in the region such as those in India, South Korea and China to tighten monetary policy,” the news service writes. “The impact [of global food price increases] has been somewhat mitigated in Asia by the fact that increases in global prices of rice, the region’s staple food, have been less than rises in other commodity costs,” Reuters notes. Roome said, “One thing that we feel is important is to keep this question of agricultural productivity, particularly in a climate changing world, front and centre of the global debate in a forum like G20, so we can ensure that adequate attention and resources are paid to addressing these issues now” (Kihara, 2/16).

Bloomberg writes that Abdolreza Abbassian, a senior economist at the U.N. Food and Agriculture Organization (FAO), said countries in Africa and Latin America, such as Mozambique and Bolivia, are most at risk of riots as food prices increase. “The low-income food deficit countries are on the front line of the current surge in world prices,” he said an e-mail Feb. 14. “Other countries where expensive food imports may become a ‘major burden’ include Uganda, Mali, Niger and Somalia in Africa, Kyrgyzstan and Tajikistan in Asia and Honduras, Guatemala, and Haiti in Latin America, he said.” Abbassian added that North Africa remains “vulnerable, even more so than before as situations are uncertain and domestic price stability depends on the good functioning and continuation of subsidy programs, such as in Egypt” (Larkin, 2/16).

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