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Food Price Volatility a Growing Concern, World Bank Stands Ready to Respond
…In 2008, while other grains increased in price, rice and wheat prices rose the most, although the price fell quite substantially in 2009 due to a notable supply response by farmers seeking to benefit from higher prices. In 2012, prices have risen across all the non-rice grains – wheat, corn and soybeans:
- Wheat prices are up over 50 percent since mid-June;
- The price for corn has risen more than 45 percent since mid-June; and
- Soybeans are up almost 30 percent since the beginning of June and up almost 60 percent since the end of last year.
As recently as early June, analysts had expected price declines after the new harvests, not spikes. There had been early planting of corn and some soybeans in the United States, and the disastrous drought was unpredictable at that stage. Price increases will affect not only bread and processed food, but also animal feed and ultimately the price of the meat.
In 2008, the price of rice more than tripled, which had a huge negative impact on the poor, especially in Asia. Although current rice prices remain at elevated levels, existing rice stocks are relatively comfortable. In addition, current prices of crude oil, fertilizers and international freight are at lower levels than in 2008, which will both ease the costs of importing food, and also the sowing and growing of next season’s crop.,,,
The impact of the U.S. drought on global markets is exacerbated by other countries also currently suffering from weather-related production issues. Almost continuous rain is causing problems for the wheat crop in many European countries, whereas the wheat crops in Russia, Ukraine and Kazakhstan have been hit hard by a lack of rain. In India, monsoon rainfall is about 20 percent below the long-term annual average. July is the critical planting month and there may be major negative implications if rains do not pick up.
@ Food Price Volatility a Growing Concern, World Bank Stands Ready to Respond:
2012-08-01 15:45:43
Source: http://gmopundit.blogspot.com/2012/08/food-price-volatility-growing-concern.html
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