News / Africa

Higher Wheat Prices Do Not Signal Another Food Price Crisis

Multimedia

Audio
Joe DeCapua

Despite a recent rise in the cost of wheat, food policy analysts are warning not to compare it to the food price crisis of 2007/2008.  The International Food Policy Research Institute (IFPRI) says “panic” over higher wheat prices is “baseless and could only hurt the poor.”

Concern has risen in some quarters because drought and wildfires have affected Russia’s wheat harvest.  The government has banned wheat exports into next year.

Maximo Torero, director of IFPRI’s Markets, Trade and Institutions Division, says, “It’s not an advocacy message.  It’s basically the reality.  The problem is there have been a lot of linkages between the 2007/2008 [crisis] with the current crisis.  And the situations are pretty different.”

How different?

“In this case, despite the problems of Russia and the reduction of supply in Russia and the closing of their borders in terms of exports of wheat, there are still sufficient grains available.  And there are also sufficient stocks, around 50 million metric tons more than 2007/2008,” he says.

What’s more, he says, “The prices of the other commodities, which in 2007/2008 were increasing substantially, have not increased at those levels, which mean corn and soybeans.  And also the price of oil is US$ 75 per barrel, which before was one hundred and thirty something.”

Make matters worse for the poor

An IFPRI statement says suggestions that the situation today and that of a few years ago are the same “serve to drive up food prices and hurt poor people, who spend much or most of their incomes on food.  They need neither jittery markets nor ad hoc protectionism, which has exacerbated past food crises.”

Torero says, “Calm down.  Because the problem is, if there is a lot of pressure through media or through news telling that we are in the same crisis as before, what could happen is that some countries could get into a nervous situation.  Internal politics could affect the situation.”

That could result in those countries following Russia’s example and imposing an export ban on wheat.  “And then, of course, that could create a problem,” he says.

IFPRI also points out that bad weather, which it calls a perennial wildcard in agriculture and commodity markets, has not affected all producers.

“In some countries, like in Russia, we had a problem.  But in others, we’re having a bumper harvest, like in the case of the U.S.,” he says.  Australia and Canada are also having good wheat harvests.

“So, we don’t see weather affecting all at the same time,” Torero says.  And while Pakistan has been hit by floods, the harvest had already been collected and stored.  “What has been lost on one side can be compensated (for) on the other side.”

Mozambique

Mozambique recently experienced riots following a sharp rise in food prices.  But Torero says it’s “another example of how things get distorted.”

He adds, “What happened in Mozambique basically was a response of the government increasing control prices – prices that were fixed by the government, not fixed by the market – in a significant amount.”

The government action affected the price of such things as electricity, water and bread.

“It had nothing to do with what happened… at the global level.  The reasoning behind [the price hikes] is there was a significant devaluation with respect to the currency in South Africa, from the metical [Mozambican currency] to the rand, which was huge,” he says.

The devaluation of the metical hit the country hard because Mozambique imports much of its goods from South Africa.  Nevertheless, many assumed the situation stemmed from higher wheat prices.

“It was completely linked to the food crisis and those kinds of things don’t make, honestly, too much sense,” he says.

You May Like

Lebanese Media Unite to Support Palestinians in Gaza

Joint newscast billed as Arab world’s first unified news bulletin in support of Hamas-controlled Gaza Strip More

Photogallery Australian PM Alleges ‘Coverup’ at MH17 Crash Site

Meanwhile, Russia's ambassador to Malaysia denies plane's black boxes were opened before they were handed over to Malaysian officials More

Despite Advances in AIDS Treatment, Stigma Lingers

Leading immunologist tells VOA that stigma is often what prevents those infected with disease from seeking treatment More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
IAEA: Iran Turns its Enriched Uranium Into Less Harmful Formi
X
July 22, 2014 10:26 AM
Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video Relic of Saint Draws Catholics Worried About Immigration Issue

A Roman Catholic saint who is a figure of devotion for those crossing the border into the United States is attracting believers concerned about the plight of undocumented immigrants. Mike O'Sullivan reports from Los Angeles, where a relic of Saint Toribio has drawn thousands to local churches.
Video

Video Ukraine Rebels Surrender MH17 Black Boxes

After days of negotiations, a senior separatist leader handed over two black boxes from an airliner downed over eastern Ukraine to Malaysian experts early Tuesday. While on Monday, the U.N. Security Council unanimously demanded that armed groups controlling the crash site allow safe and unrestricted access to the wreckage.
Video

Video In Cambodia, HIV Diagnosis Brings Deadly Shame

Although HIV/AIDS is now a treatable condition, a positive diagnosis is still a life altering experience. In Cambodia, people living with HIV are often disowned by friends, family and the community. This humiliation can be unbearable. We bring you one Cambodian woman’s struggle to overcome a life tragedy and her own HIV positive diagnosis.
Video

Video Nature of Space Exploration Enters New Age

Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.
Video

Video Chicago’s Argonne Lab Developing Battery of the Future

In 2012, the U.S. Department of Energy’s Office of Science awarded a $120 million grant to a new technology center focused on battery development - headquartered at Argonne National Laboratory in suburban Chicago, Illinois. As VOA’s Kane Farabaugh reports, there scientists are making the next technological breakthroughs in energy storage.
Video

Video In NW Pakistan, Army Offensive Causes Massive Number of Displaced

Pakistan’s army offensive in North Waziristan has resulted in the large-scale displacement of the local population. VOA's Ayaz Gul reports from northwest Pakistan where authorities say around 80 percent of the estimated 1 million internally displaced persons [IDPs] have settled in Bannu district, while much of the remaining 20 percent are scattered in nearby cities.
Video

Video Kurdish Peshmerga Force Secures Kirkuk, Its Oil

The Kurdistan regional government has sent its Peshmerga troops into the adjacent province of Kirkuk to drive out insurgents, and to secure the area's rich oil fields. By doing this, the regional government has added a fourth province to the three it officially controls. The oil also provides revenue that could make an independent Kurdistan economically strong. VOA’s Jeffrey Young went out with the Peshmerga and filed this report.
Video

Video Malaysia Reeling: Second Air Disaster in Four Months

Malaysia is reeling from the second air disaster in four months involving the country’s flag carrier. Flight 340 vanished in March and despite an extensive search, no debris has been found. And on Thursday, Flight 17, likely hit by a surface-to-air missile, came apart over eastern Ukraine. The two incidents together have left more than 500 people dead. VOA Correspondent Steve Herman reports from Kuala Lumpur.

AppleAndroid