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

Photogallery South Africa Bans Travelers From Ebola-stricken Countries

South Africans returning from affected West African countries will be thoroughly screened, required to fill out medical questionnaire, health minister says More

Multimedia UN Launches ‘Biggest Aid Operation in 30 Years’ in Iraq

Move aims to help thousands of Iraqi religious minorities who fled their homes as Kurdish, Iraqi government forces battle Sunni insurgents More

Video African Media Tries to Educate Public About Ebola

IT specialists, together with radio and TV reporters, are battling misinformation and prejudice about disease 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.
Gaza Conflict, Hamas Popularity Challenge Abbasi
X
Scott Stearns
August 21, 2014 9:20 PM
The Palestinian unity government of Mahmoud Abbas has failed to convince Hamas to agree to Egyptian-negotiated terms with Israel on a Gaza cease-fire. VOA State Department Correspondent Scott Stearns reports on what the Gaza conflict means for President Abbas, with whom U.S. officials have worked for years on a two-state solution to the Israeli-Palestinian conflict.
Video

Video Gaza Conflict, Hamas Popularity Challenge Abbas

The Palestinian unity government of Mahmoud Abbas has failed to convince Hamas to agree to Egyptian-negotiated terms with Israel on a Gaza cease-fire. VOA State Department Correspondent Scott Stearns reports on what the Gaza conflict means for President Abbas, with whom U.S. officials have worked for years on a two-state solution to the Israeli-Palestinian conflict.
Video

Video Nigeria's 'Nollywood' Movie Industry Rolls in High Gear

Twenty years after its birth in a video shop in Lagos, Nigeria's "Nollywood" is one of the most prolific film industries on earth. Despite low budgets and whirlwind production schedules, Nigerian films are wildly popular in Africa and industry professionals say they hope, in the future, their films will be as great in quality as they are in quantity. Heather Murdock has more for VOA from Lagos.
Video

Video UN Launches 'Biggest Aid Operation in 30 Years' in Iraq

The United Nations has launched what it describes as one of the biggest aid operations in 30 years in northern Iraq, as hundreds of thousands of refugees flee the extremist Sunni militant group calling itself the Islamic State. As Kurdish and Iraqi forces battle the Sunni insurgents, the fighting has forced more people to flee their homes. Kurdish authorities say the international community must act now to avert a humanitarian catastrophe. Henry Ridgwell reports for VOA from London.
Video

Video Cambodian American Hip Hop Artist Sings of Personal Struggles

A growing underground movement of Cambodian American hip hop artists is rapping about the struggles of living in urban America. Most, if not all of them, are refugees or children of refugees who came to the United States from Cambodia to escape the Khmer Rouge genocide of the 1970s. Through their music, the artists hope to give voice to immigrants who have been struggling quietly for years. Elizabeth Lee reports from Long Beach, California.
Video

Video African Media Tries to Educate Public About Ebola

While the Ebola epidemic continues to claim lives in West Africa, information technology specialists, together with radio and TV reporters, are battling misinformation and prejudice about the disease - using social media to educate the public about the deadly virus. VOA’s George Putic has more.
Video

Video Ferguson Calls for Justice as Anger, Violence Grips Community

Violence, anger and frustration continue to grip the small St. Louis suburb of Ferguson, Missouri. Protests broke out after a white police officer fatally shot an unarmed black teenager on August 9. The case has sparked outrage around the nation and prompted the White House to send U.S. Attorney Eric Holder to the small community of just over 20,000 people. VOA’s Mary Alice Salinas has more from Ferguson.
Video

Video Beheading Of US Journalist Breeds Outrage

U.S. and British authorities have launched an investigation into an Islamic State video showing the beheading of kidnapped American journalist James Foley by a militant with a British accent. The extremist group, which posted the video on the Internet Tuesday, said the murder was revenge for U.S. airstrikes on militant positions in Iraq - and has threatened to execute another American journalist it is holding. Henry Ridgwell has more from London.
Video

Video Family Robots - The Next Big Thing?

Robots that can help us with daily chores like cooking and cleaning are a long way off, but automatons that serve as family companions may be much closer. Researchers in the United States, France, Japan and other countries are racing to build robots that can entertain and perform some simpler tasks for us. VOA’s George Putic reports.
Video

Video In Ukraine, Fear and Distrust Remain Where Fighting has Stopped

As the Ukrainian military reclaims control of eastern cities from pro-Russian separatists, residents are getting a chance to rebuild their lives. VOA's Gabe Joselow reports from the town of Kramatorsk in Donetsk province, where a sense of fear is still in the air, and distrust of the government in Kyiv still runs deep.
Video

Video Five Patients Given Experimental Ebola Drug Said to Be Improving

The World Health Organization has approved the use of experimental treatments for Ebola patients in West Africa. The Ebola outbreak there is unprecedented, the disease deadly. The number of people who have died from Ebola has surpassed 1,200. VOA's Carol Pearson reports on the ethical considerations of allowing experimental drugs to be used.
Video

Video China Targets Overseas Assets of Corrupt Officials

As China presses forward with its anti-graft effort, authorities are targeting corrupt officials who have sent family members and assets overseas. The efforts have stirred up a debate at home on exactly how many officials take that route and how likely it is they will be caught. Rebecca Valli has this report.
Video

Video Leading The Fight Against Islamic State, Kurds Question Iraqi Future

Western countries including the United States have begun arming the Kurdish Peshmerga forces in northern Iraq to aid their battle against extremist Sunni militants from the Islamic State. But there are concerns that a heavily-armed Kurdistan Regional Government, or KRG, might seek to declare independence and cause the break-up of the Iraqi state. As Henry Ridgwell reports from London, the KRG says it will only seek greater autonomy from Baghdad.
Video

Video In Rural Kenya, Pressure Builds Against Female Circumcision

In some Kenyan communities, female genital mutilation remains a rite of passage. But activists are pushing back, with education for girls and with threats of punishment those who perform the circumcision. Mohammed Yusuf looks at the practice in the rural eastern community of Tharaka-Nithi.

AppleAndroid