News / Economy

Soaring Food Prices Tied in Part to Oil Prices

Demonstrators shout slogans as they hold steel plates during a rally to protest food prices in New Delhi February 23, 2011.
Demonstrators shout slogans as they hold steel plates during a rally to protest food prices in New Delhi February 23, 2011.

Multimedia

The United Nations warns that global food prices are rising at alarming levels.  The Food and Agriculture Organization says the cost of staples such as cereals, meat and dairy products has risen for eight straight months to reach a new high in February.  The U.N. agency warns food prices could spike even higher because of the unrest in the Middle East and North Africa.

Food prices are at their highest levels since the FAO began monitoring prices two decades ago.  The agency's senior grain economist, Abdolreza Abbassian, says except for sugar, the price of basic food commodities such as wheat, meat and dairy products has risen steadily since June.

"We are still in historic peaks. The February prices unfortunately rose even further, so whether you calculate it on real basis, inflation corrected, or nominal, the food prices, which are a measure of international prices for basic food commodities, have reach a new high, yes," Abbassian said.

Higher food prices were among the triggers for protests in Egypt and Tunisia.  

But Abbassian says higher oil prices due to the continuing turmoil in Libya are making matters worse.

"One of the strong linkages between the food and the energy sector is through biofuels, so when the oil prices are very high, there is definitively more incentive to produce more biofuels and that means using more food crops to produce them," said Abbassian.

Economists say that's what happened in 2007 and 2008, when high oil prices prompted greater demand for biofuels such as ethanol.  

The international aid group Oxfam says millions of people around the world are sliding into poverty as they struggle to pay for basic foods.  The organization is urging the international community to curb oil price speculation and reverse the demand for biofuels.

Until that happens, Abbassian warns food prices will continue to rise.

"Obviously the longer these [oil] prices remain high, the more we have to think that it could have a spillover effect into the grain sector especially in the coming weeks and months," Abbassian said.

Abbassian says a major difference between the current situation and the food crisis of 2008 is that the price of rice, a staple for half the world’s population, has risen less than four percent since last year.

Wheat prices, on the other hand, are up 60 percent, while corn, a major ingredient for biofuels, has risen 93 percent since last year.

You May Like

Ebola Death Toll Nears 5,000 as Virus Advances

West Africa bears heaviest burden; Mali toddler’s death raises new fears More

Jordan’s Battle With Islamic State Militants Carries Domestic Risks

Despite Western concerns that IS militants are preparing a Jordanian offensive, analysts call the kingdom's solid intel a strong deterrent More

Asian-Americans Assume Office in Record Numbers

Steadily deepening engagement in local politics pays off for politicians like Chinese-American Judy Chu 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.
Talks to Resume on Winter Gas for Ukrainei
X
Al Pessin
October 25, 2014 4:21 PM
Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Talks to Resume on Winter Gas for Ukraine

Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video Comanche Chief Quanah Parker’s Century-Old House Falling Apart

One of the most fascinating people in U.S. history was Quanah Parker, the last chief of the American Indian tribe, the Comanche. He was the son of a Comanche warrior and a white woman who had been captured by the Indians. Parker was a fierce warrior until 1875 when he led his people to Fort Sill, Oklahoma, and took on a new, peaceful life. As VOA’s Greg Flakus reports from Cache, Oklahoma, Quanah’s image remains strong among his people, but part of his heritage is in danger of disappearing.
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 After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
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.

All About America

AppleAndroid

World Currencies

EUR
USD
0.7893
JPY
USD
107.68
GBP
USD
0.6238
CAD
USD
1.1214
INR
USD
61.185

Rates may not be current.