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

Israelis Quietly Expand Enclave in Palestinian District of Jerusalem

Estimated 500 settlers, armed or protected by paramilitary police, live in Silwan among 50,000 Palestinians More

Video US, Iran Face Similar Challenges in Syrian Fight Against IS

Both Washington, Tehran back fighters battling Islamic State militants in Iraq -- but in Syria they support opposing sides in country’s civil war More

China Boosts Efforts to Help Afghan, Regional Stability

Observers say China’s increased regional involvement are due to concerns that Afghan instability and the presence of anti-China militants in Pakistani border areas could fuel Xinjiang troubles 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.
China Political Meeting Seeks to Improve Rule of Lawi
X
William Ide
October 20, 2014 10:23 AM
China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.
Video

Video Latinas Converting to Islam for Identity, Structure

Latinos are one of the fastest growing groups in the Muslim religion. According to the Pew Research Center, about 6 percent of American Muslims are Latino. And a little more than half of new converts are female. VOA’s Carolyn Presutti travelled to Miami, Florida -- where two out of every three residents is Hispanic -- to learn more.
Video

Video Nigeria Agrees to Cease-Fire With Boko Haram

Islamist militant group Boko Haram and the Nigerian government have agreed to a cease-fire. The Nigerian government issued an order Friday, telling all military chiefs "to comply with the cease-fire agreement in all theaters of operations. Why now and the significance of the agreement are questions on some people’s minds. VOA's Mariama Diallo reports.
Video

Video Kobani Fighting Sends 400,000 Refugees to Turkey

The offensive by Islamic State militants against the northern Syrian city of Kobani has caused hundreds of thousands of residents to flee to Turkey. They receive help from Turkish authorities and individuals, but say much more is needed. VOA’s Scott Bobb reports from the town of Suruc a few kilometers from the border.
Video

Video Exclusive: American Joins Kurds' Anti-IS Fight

The United States and other Western nations have expressed alarm about their citizens joining Islamic State forces in Syria and Iraq. In a rare counterpoint to the phenomenon, an American has taken up arms with the militants' Syrian Kurdish opponents. Elizabeth Arrott has more in this exclusive profile by VOA Kurdish reporter Zana Omer in Ras al Ayn, Syria.
Video

Video South Korea Confronts Violence Within Military Ranks

Every able-bodied South Korean male between 18 and 35 must serve for 21 to 36 months in the country’s armed forces, depending upon the specific branch. For many, service is a rite of passage to manhood. But there are growing concerns that bullying and violence come along with the tradition. Reporter Jason Strother has more from Seoul.
Video

Video Comanche People Maintain Pride in Their Heritage

The Comanche (Indian nation) once were called the “Lords of the Plains,” with an empire that included half the land area of current day Texas, large parts of Oklahoma, New Mexico, Kansas and Colorado.The fierceness and battle prowess of these warriors on horseback delayed the settlement of most of West Texas for four decades. VOA’s Greg Flakus reports from Lawton, Oklahoma, that while their warrior days are over, the 15,000 members of the Comanche Nation remain a proud people.
Video

Video Turkey Campus Attacks Raise Islamic Radicalization Fears

Concerns are growing in Turkey of Islamic radicalization at some universities, after clashes between supporters of the jihadist group Islamic State (IS) or ISIS, and those opposed to the extremists. Pro-jihadist literature is on sale openly on the streets of Istanbul. Critics accuse the government of turning a blind eye to radicalism at home, while Kurds accuse the president of supporting IS - a charge strongly denied. Henry Ridgwell reports from London.
Video

Video Syrian Defector Leaks Shocking Photos of Torture Victims

Shocking photographs purporting to show Syrian torture victims are on display at the U.S. Holocaust Memorial Museum in Washington. The museum says the graphic images are among thousands of photographs recently smuggled out of Syria by a military policeman-turned-defector. As VOA reporter Julie Taboh reports, the museum says the photos provide further evidence of atrocities committed by the government of Syrian President Bashar al-Assad against its own people.
Video

Video Drought-Stricken California Considers Upgrading Water System

A three-year drought in California is causing a water shortage that is being felt on farms and cities throughout the state. As VOA's Mike O’Sullivan reports, water experts, consumers and farmers say California needs to make changes to cope with an uncertain future.
Video

Video TechShop Puts High-tech Dreams Within Reach

Square, a business app and card reader, makes it possible to do credit card transactions through cell phones. But what made Square possible? VOA’s Adrianna Zhang and Enming Liu have the answer.

All About America

AppleAndroid