Global food prices hit record high
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Feb. 3: Mr Hosni Mubarak and Mr Zine El Abidine Ben Ali are not the world’s foremost experts on food prices, but they are well versed with its effects. One of the strong men has already lost his presidency while the other is hanging on, at least at the time of writing. High food prices, along with widespread unemployment, was one of the reasons that had brought thousands of protestors to the streets — first in Tunisia and then Egypt. Going by the current trend, this unrest could spread as food prices around the world have touched a new historic high. Even worse, from a consumer’s point of view is that experts feel prices will remain high for months to come.
The United Nations Food and Agricultural Organisation, which compiles a global food price index, says that food prices for January 2011 were at a historic high. The value of the index at 231 was 3.4 per cent higher than the figure for December, and is at the highest level ever since 1990 — when FAO started to measure these prices. Compared to the last year, the index has gone up almost 30 per cent. This index measures prices of a variety of food items include cereals, dairy products, edible oil, meat and sugar.
“The new figures clearly show that the upward pressure on world food prices is not abating,” said FAO economist and grains expert, Mr Abdolreza Abbassian.
“These high prices are likely to persist in the months to come,” he added. “The only encouraging factor so far stems from a number of countries, where — due to good harvests — domestic prices of some of the food staples remain low compared to world prices,” he added. Specific items such as dairy products, edible oils and sugar are either at or close to record high levels. Factors that have pushed up food prices include a severe drought in Russia in 2010 and floods in Australia. Both the countries are important exporters of agricultural products. Apart from poor harvests, other factors are also at work.
Growing incomes in countries such as India and China has lead to consumption of better quality food items. There has also been upward pressure because of rising biofuel production —to which quite a bit of agricultural land has been diverted.
Prices this time have already crossed the levels of 2008 — the last time food prices had become painfully high, and had led to food-riots in some countries.
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