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World Bank issues hunger warning after droughts in U.S. and Europe

Saturday, September 1, 2012 11:10

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Desdemona Despair

By Larry Elliott, www.guardian.co.uk
30 August 2012

The World Bank issued a global hunger warning last night after severe droughts in the US and eastern Europe sent food prices to a record high.

Damage to crop harvests from exceptionally dry weather this year raised sharply the Bank’s food price index taking it above its peak in early 2011.

The Washington-based bank blamed the drought in the US for the 25% price rise of maize and 17% price rise in soya beans last month, adding that a dry summer in Russia, the Ukraine and Kazakhstan lay behind the 25% jump in the cost of wheat.

“Food prices rose again sharply threatening the health and well-being of millions of people,” said World Bank group president, Jim Yong Kim. “Africa and the Middle East are particularly vulnerable, but so are people in other countries where the prices of grains have gone up abruptly.”

The bank said food prices overall rose by 10% between June and July to leave them 6% up on a year earlier. “We cannot allow these historic price hikes to turn into a lifetime of perils as families take their children out of school and eat less nutritious food to compensate for the high prices,” said Kim. “Countries must strengthen their targeted programs to ease the pressure on the most vulnerable population, and implement the right policies.”

He added that the Bank was spending $9bn this year supporting agriculture and pledged that help to poor countries affected by food price hikes would continue.

World Bank issues hunger warning after droughts in U.S. and Europe

By Doug Palmer
31 August 2012

WASHINGTON (Reuters) – World food prices jumped 10 percent in July as drought parched crop lands in the United States and Eastern Europe, the World Bank said in a statement urging governments to shore up programs that protect their most vulnerable populations.

From June to July, corn and wheat prices rose by 25 percent each, soybean prices by 17 percent, and only rice prices went down, by 4 percent, the World Bank said on Thursday.

Overall, the World Bank’s Food Price Index, which tracks the price of internationally traded food commodities, was 6 percent higher than in July of last year, and 1 percent over the previous peak of February 2011.

U.S. soybean futures hit a record high of $17.78 per bushel in trading on Thursday, while corn futures remained near the record of $8.49 set earlier this month.

“We cannot allow these historic price hikes to turn into a lifetime of perils as families take their children out of school and eat less nutritious food to compensate for the high prices,” World Bank Group President Jim Yong Kim said. “Countries must strengthen their targeted programs to ease the pressure on the most vulnerable population, and implement the right policies.”

“Africa and the Middle East are particularly vulnerable, but so are people in other countries where the prices of grains have gone up abruptly,” Kim added.

A severe drought in the United States has sharply cut corn and soybean yields this year, while a dry summer in Russia, Ukraine, and Kazakhstan has hurt wheat output.

The World Bank said its experts do not foresee a repeat of 2008, when a food price spike triggered riots in some countries.

“However, negative factors – such as exporters pursuing panic policies, a severe El Niño, disappointing Southern hemisphere crops, or strong increases in energy prices – could cause significant further grain prices hikes such as those experienced four years ago,” the bank said. […]

Colin Roche, a spokesman for the development group Oxfam International, said it was not clear whether governments were prepared to take action “before prices spiral out of control and push more people into hunger.”

The group of 20 leading economies has delayed any decision on joint action until after the U.S. Agriculture Department’s September estimate of this year’s harvest.

“This ‘wait and see’ attitude is unacceptable especially when the World Bank report has warned that prices are expected to remain high and volatile,” Roche said. “Oxfam is already seeing the devastating impact of food price volatility in developing countries that rely on food imports.”