News / Economy

World Food Prices Remain Steady But High

Drought in the United States and the Russian Federation has reduced anticipated global corn and wheat supplies.
Drought in the United States and the Russian Federation has reduced anticipated global corn and wheat supplies.
Global food prices were unchanged in the August U.N. index, following a sharp rise in the previous month.   

A summer of drought in the United States and the Russian Federation has reduced anticipated global corn and wheat supplies. The U.N. Food and Agriculture Organization’s index of globally-traded food commodities rose six percent in July as a result.

Worst is over

But the worst appears to be over, says FAO economist Concepcion Calpe. “We’re not in a bad situation, or as bad situation as we were last month because the prospects are not worsening further. And that is already good news.”

It is also relatively good news that the index remains about 10 percent below its February 2011 peak, Calpe says, but food prices are still double what they were a decade ago.

“They’re high; they are not low," Calpe says. "But they are not as high as they were last year.”

Market volatility

Demand remains high for food commodities. The United Nations estimates that more cereal crops will be consumed this year than will be produced, which means markets will dip into reserve supplies.

But Calpe cautions that those reserves have been low for several years. “And therefore we are very much susceptible to very quick changes because there is very little buffer on which to rely to protect ourselves should there be other bad news on the production front.”

According to Calpe, market volatility is likely to be a factor for the foreseeable future, until production catches up with demand.

While prices are high, many experts do not expect a repeat of the crisis of 2007 and 2008, when spikes in food prices contributed to civil unrest in several countries. For one thing, they say, energy prices are lower now, which means producing and delivering food is not as costly.

Rice is nice

And this year’s harsh weather has not affected rice, another key commodity, says Gary Eilerts, head of the U.S. Agency for International Development’s Famine Early Warning System.

“Rice is very calm, very nice," he says. "The prices are not volatile. There’s a large supply. And so, countries that depend on that, that were hurt a great deal in 2008, are not being touched right now.”

The countries hurt by high rice prices in 2008 might be less vulnerable to high corn prices because they do not buy their corn from the global markets represented in the FAO food price index.

“To a large degree, what happens in that index is not a very clear reflection of the impacts that we’re going to see in the developing world, in the food insecure world," Eilerts says. "So we should all just take a second breath and watch what happens.”

During the coming months, experts will be watching as harvests come in and as the Southern Hemisphere begins its growing season.

You May Like

African States Push to Keep Boko Haram Offline

Central African telecoms ministers working with Nigeria to block all videos posted by Boko Haram in effort to blunt Nigerian militant group's propaganda More

Falling Oil Prices, Internet-Savvy Youth Pose Challenge for Gulf Monarchies

Across the Gulf, younger generations are putting a strain on traditional politics More

Philippines Call Center Workers Face Challenges

Country has world’s largest business process outsourcing, or BPO, industry, employing some one-million workers 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.
US Supreme Court Hears Hijab Discrimination Casei
X
Katherine Gypson
February 25, 2015 11:30 PM
The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video US Supreme Court Hears Hijab Discrimination Case

The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video Falling Gas Prices Hurt Nascent Illinois Hydraulic Fracturing Industry

Falling oil prices are helping consumers purchase cheaper petroleum at the pump. But that’s made hydraulic fracturing or “fracking” less economically viable for the companies in the United States invested in the process. VOA’s Kane Farabaugh reports on one Midwestern town that was hoping to change its fortunes by cashing in on the next big U.S. oil boom.
Video

Video Fighting in Sudan's South Kordofan Fuels Mass Displacement

Heavy fighting in Sudan's South Kordofan state is causing hundreds of thousands to flee into uncertain conditions. Local aid organizations estimate as many as 400,000 civilians have been internally displaced since the conflict began more than three years ago, while another 250,000 have fled across the border to refugee camps in South Sudan. VOA's Adam Bailes reports.
Video

Video Lao Dam Project Runs Into Opposition

A Lao dam project on a section of the Mekong River is drawing opposition from local fishermen, international environmental groups and neighboring countries. VOA's Say Mony visited the region to investigate the concerns. Colin Lovett narrates.
Video

Video A Filmmaker Discovers Her Biracial Identity in "Little White Lie

Lacey Schwartz grew up in an upper middle-class Jewish family, in a town in upstate New York where almost everyone she knew was white. She assumed that she was, as well. Her recent documentary, Little White Lie, tells the story of how she uncovered the secret of her true racial background. VOA’s Carolyn Weaver has more on the film.
Video

Video Deep Under Antarctic Ice Sheet, Life!

With the end of summer in the Southern hemisphere, the Antarctic research season is over. Scientists from Northern Illinois University are back in their laboratory after a 3-month expedition on the Ross Ice Shelf, the world’s largest floating ice sheet. As VOA’s Rosanne Skirble reports, they hope to find clues to explain the dynamics of the rapidly melting ice and its impact on sea level rise.
Video

Video US-Cuba Normalization Talks Resume Friday

Negotiations aimed at normalizing diplomatic relations between the U.S. and Cuba resume Friday. On the table: lifting a half-century trade embargo and easing banking and travel restrictions. There's opposition in Congress, but some analysts say there may be sufficient political and economic incentives in both nations for a potential breakthrough this year. VOA's Mil Arcega reports.
Video

Video Pakistan's Deadline For SIM Registration Has Cellphone Users Scrambling

Pakistani cell phone users have until midnight Thursday to register their SIM cards, or their service will be cut off. While some privacy experts worry about government intrusion, many Pakistanis are just worried about keeping their phone lines open. VOA Deewa reporter Arshad Muhmand has more from Peshawar.
Video

Video Myanmar Warns Factory Workers to End Strikes

Outside Myanmar's main city Yangon, thousands of workers walked off their jobs earlier this month demanding a doubling of their wages, pay raises after a year and input from labor unions on industrial regulations. Since Friday, the standoff has grown more tense as police moved in to disrupt the sit-ins, resulting in clashes that injured people from both sides. VOA correspondent Steve Herman visited industrial zones which have become a focus of Myanmar's fledgling workers rights movement.
Video

Video Oscar Winners Do More Than Thank the Academy

The Academy Awards presentation is Hollywood’s night to reward the best movies from the previous year. It’s typically a lot of glitter, a lot of thank you’s, a lot of speeches. But many of this year’s speeches carried messages beyond the thank you's. VOA’s Carolyn Presutti takes a look.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

World Currencies

EUR
USD
0.8836
JPY
USD
118.88
GBP
USD
0.6451
CAD
USD
1.2469
INR
USD
61.751

Rates may not be current.