Food prices on the rise

Sharp increases in food prices, particularly for cereals and oilseeds, are causing concern around the world. Overall food prices are up more than 75% since 2000, and are currently at their highest price since the 1970s. This has serious implications for food security and poverty, particularly for people in developing countries where it impacts on nutrition and health and has already sparked food riots.

Food prices have risen more than 75% since 2000	Wheat prices are up nearly 200 percent since 2002

“Higher food prices risk wiping out progress towards reducing poverty and, if allowed to escalate, could hurt global growth and security” said the United Nations Secretary-General Ban Ki-moon.

Numerous factors are influencing this price rise, including difficult seasonal conditions in the major production regions, population increases, rising demand for grain for biofuels, and increased input costs.

This situation is unlikely to ease soon.

“One thing is certain: for the past three years, the world has consumed more food than it produces. Grain stocks are at their lowest in 30 years. The situation is unsustainable.” said Mr Ban.

In the short-term the area sown to cereals is expected to increase and with normal seasonal conditions output will rise in 2008-09. But it is unlikely that the world will return to the long-term scenario of gradually declining food prices in real terms unless agricultural production is expanded, particularly in the developing world and sub-Sahara Africa.

The arable land utilised for permanent cropping is not increasing (Source: ABARE)	The average annual yield increase in developing countries has stopped increasing

Some examples from the FAO

• Second grade white Thailand rice rose to US $854 a ton on April 11. A month ago it was at $556, a year ago $323 and five years ago, $198.
• In March of this year, powdered milk sold for $4,750 a ton. A year ago it was priced at $3,288 and five years ago at $1,835.
• Yellow corn reached $250 a ton on April 4. A month earlier the price was $230 and five years ago $105.
• Dutch soy oil went for $1,400 a ton in February of this year; a month before it was $1,216, a year ago $714, and $521 five years ago.
• On April 11 of this year, wheat went for $401 a ton; a year earlier the price was $207 and five years ago, $144.

Food commodity price indices have increased across the board in 2007/08	FAO food price index for 2005 - today

World media coverage on rising food prices has been extensive, below are links to some of the available articles:

• G8 Leaders' Statement on Global Food Security, Comments by Joachim von Braun, Director General International Food Policy Research Institute [1]
• The new face of hunger [2] [The Economist]
• Food - who pays the price? [3] [BBC World Debate]
• Stem rust never sleeps [4] [The New York Times]
• The silent tsunami [5] [The Economist]
• No Grain, Big Pain [6] [Time Magazine]
• 'Silent tsunami': the food price crisis [7] [ABC World News]
• High food prices: causes, implications and solutions [8] [RIRDC]
• The food price crisis [9] [ABC Radio National]
• Rising food prices in developing countries: causes, consequences and solutions [10] [CIRAD]
• What ICRISAT thinks: battling rising food prices with productivity-boosting science [11] [ICRISAT]
• The fight on hunger [12] [FAO]
• Understanding and Containing Global Food Price Inflation [13] [CGIAR]
• Rising food prices: overview [14] [IFPRI]
• Rice Crisis Solutions [15] [IRRI]
• Global Food Crisis: what it is and what CIMMYT is doing [16] [CIMMYT]

World Conference

In June 2008 the FAO held a High-Level Conference on World Food Security: the Challenges of Climate Change and Bioenergy [17]. The conference looked at world food security in light of the impact of climate change and biofuels, which the FAO sees as potentially the biggest challenges we face this century. More information, including outcomes, is available from the website. Below are a selection of speeches from the conference:

• Address by the Secretary-General of the United Nations [18] [Ban Ki-moon]
• Action, resources and results needed now for food crisis, Zoellick says [19] [World Bank President]
• Address by the FAO Director-General [20] [Mr Jacques Diouf]
• Other speeches are available on the website [21].

G8 Hokkaido Toyako Summit 2008

The annual G8 summit runs from 7-9 July 2008 and will cover various issues, including global food security. The G8 will undertake full-fledged discussions on soaring food prices, and issue collectively a robust message that leads to action. For more information see the G8 summit website [22].

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