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Poor African Countries Hit Hard by Soaring Cereal Prices

International cereal prices continue to soar, and sub-Saharan Africa is especially hard pressed to meet the rising costs.

A new report from the UN Food and Agriculture Organization says the cereal import bill of the world’s poorest countries is expected to rise by 56 percent this year. But for poor countries in Africa, the projected increase is 74 percent. It’s blamed on a sharp rise in cereal prices due to greater demand in part from China and India…as well as higher freight rates and oil prices.

Speaking in Rome, FAO Director General Jacques Diouf says another factor is the increased demand for biofuels.

“We have seen in 2006 around 100 million tons of cereal diverted to be used for ethanol…in addition to the quantities that are used for bio-diesel from Soya bean or from palm oil. Naturally, sugar cane is also being used for ethanol production. The combination of all those factors, exacerbated by speculative activities on the Chicago (stock) market by hedge funds and other funds, has led to the level of prices that we have seen,” he says.

The head of the Food and Agriculture Organization says emergency measures are needed.

“We believe that in this present situation, we have to tackle the problem at the highest political level. To be honest with you I’m surprised that I have not been summoned to the (UN) Security Council to discuss these issues, as many of the problems that are being discussed there would not have the same consequences on peace and security in the world and on human rights of people, who need to be fed appropriately to exist and to exist in dignity. We think there is a need for immediate emergency action. To be frank, I think we’ve already lost a lot of time,” he says.

Diouf says maize seed prices have increased 36 percent, while seeds for wheat have jumped 72 percent. The cost of fertilizer and animal feed has increased around 60 percent. He says greater investment is needed in agriculture, especially in water resources.