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Food Prices Remain High in Developing Countries


A new report says developing countries continue to have very high food prices, despite improved global supplies of cereals and a sharp decline in food prices elsewhere in the world.

The UN Food and Agriculture Organization has issued its Crop Prospects and Food Situation Report. It says the situation is worst in sub-Saharan Africa. The urban poor are among the hardest hit. Adding to the problem is a sharp decline in remittances from family members overseas due to the global recession.

Paul Racionzer is an FAO agriculture economist. From Rome, he spoke to VOA English to Africa Service reporter Joe De Capua about why food prices remain high in developing countries.

"The first thing to point out is that there's not just one cause. There's a whole host of reasons that result in the situation where we're seeing high prices remaining in these developing countries. There is one general common factor, which I think is fairly well known in sort of economic analysis, and that is…when prices go up very quickly in response to shock…they take a very long time to come down again," he says.

Looking at some of the regional causes for the high food prices in sub-Saharan Africa, Racionzer says, "For example, in western Africa, we have a situation where (there's) basically a regional high demand driven by the strong food processing industry and poultry sector in Nigeria…and that's keeping prices in the whole eastern part of the sub-region quite high."

As for East Africa, he says, "Some reduced crops in Kenya, for example…[are] creating a supply problem there. With a sort of, in sympathy, prices in neighboring Uganda are also being kept high because of this factor."

In southern Africa, the FAO economist says, "We're in what's known as the lean period now, where they're basically just before the harvest, where supplies are generally very low. And on top of that, we're seeing that the pace of imports into the region has been very slow."

But things could improve for the region. "In southern Africa, one could assume quite confidently that once the new harvest is in full swing…there should be this sort of normal seasonal effect of prices coming down. But it's not guaranteed. What happened last year at the time of the rising prices, even when harvests were happening, prices were not coming down. But one could maybe hope that now…the international prices have come down that this season we might get back into the normal seasonal patterns. So, for example, in southern Africa, when the harvests come on line prices would come down there," he says.

The FAO says in East Africa, more than 17 million people face serious food insecurity due to poor harvests and conflict. In southern Africa, high food prices and slow imports are affecting the food security of over eight and a half million people.


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