Matthew O. Berger
IPS News
WASHINGTON, Sep 21, 2010 (IPS) – While global food prices declined for the first half of this year, they have spiked in recent months, according to a new World Bank publication, and this volatility could in turn push up the local food prices of the world’s poorest and most malnourished countries.
The Bank’s grain price index had declined by 16 percent over the first six months of 2010 before rising that same amount between mid-June and August.
For now, the price increases have had mixed effects on domestic prices. In the four months leading up to July, wheat prices rose 27 percent in Afghanistan – after those prices had declined steadily over the past year. In eastern and southern Africa, though, the price of the main staple, maize, has continued to decline this summer. In Kenya, for instance, maize prices are at less than half their Dec. 2009 levels, with smaller recent declines in Tanzania, Uganda and elsewhere.
“These examples show that local food prices are often determined by domestic or regional factors unrelated to global commodity market trends,” the World Bank report says. Overall, out of the 42 countries for which the Bank has data on the price of their staple food until July, the price of that staple was lower in July than it was in April in over half of them.
Fears of a repeat of the 2007-08 food crisis might therefore be overblown, at least for some parts of the world. The Bank notes that the price spikes were fueled by projections of low wheat production by powerhouse producers Russia, Ukraine, Kazakhstan and Canada.
Russia had even announced a ban on wheat exports due to expectations this summer’s heat wave and drought would result in its crop being a third less than last year.
But the Bank and other institutions have pointed out that even though commodity markets have been fearful about grain shortages, and thus have driven up prices, there are “ample world wheat stocks” and good prospects for the wheat output of the U.S., EU and other producers.
The Washington-based International Food Policy Research Institute (IFPRI) notes that today’s food situation is different than the 2007-08 crisis in a number of ways.
“We are able to cope with lost production better than we did two years ago,” Maximo Torero, director of IFPRI’s Markets, Trade and Institutions Division, said last week. He noted that both wheat production and wheat stocks are higher this year than during that crisis.
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