March 29, 2024

Green Blog: A Modest Rise in Global Food Prices

Green: Living

Given the fears set off by the agricultural disasters of the summer, the latest report on food prices from the United Nations has to be counted as good news. The Food and Agriculture Organization reported Thursday that global prices rose 1.4 percent in September from the previous month.

After sharp increases this summer, the climb in food prices was modest last month.Food and Agriculture OrganizationAfter sharp increases this summer, the climb in food prices was modest last month.

Prices increased only 1 percent in the all-important cereals sector, with gains in rice and wheat prices somewhat offset by a drop in corn prices. The overall figures suggest that the price run-ups that accompanied this summer’s weather problems in several producing countries – including the United States, the world’s largest grain exporter – are now largely factored into the market.

And, barring some fresh disaster early in the Southern Hemisphere’s growing season, it probably means we will get through this year without witnessing the peaks in global food prices seen in 2008 and 2011. Those, readers will recall, set off global unrest and prompted renewed commitments to agricultural development in poor countries.

Still, the long-term food outlook remains worrisome. Prices are still high by the standards of recent history, and we have seen big increases in global hunger as a consequence. Adjusted for inflation, prices are more than 50 percent above the level that prevailed at the turn of the 21st century. As my colleague Ron Nixon relates in his take on the report, concerns persist about the potential for food shortages in developing countries.

The F.A.O. projects a 2.6 percent drop in world grain production this year.Food and Agriculture OrganizationThe F.A.O. projects a 2.6 percent drop in world grain output this year.

The F.A.O. now projects a 2.6 percent decline in world grain production this year, compared with record output in 2011. And even though high prices are suppressing demand somewhat, the agency expects the world to use more grain than it produces in the coming year. That means global grain stocks, already tight, will decline further.

In this environment, experts say, it would not take much of a supply shock to set off a new spiral of price increases.

Global food prices have been highly volatile in recent years.Food and Agriculture OrganizationGlobal food prices have been highly volatile in recent years.

Article source: http://green.blogs.nytimes.com/2012/10/04/a-modest-rise-in-global-food-prices/?partner=rss&emc=rss