Global Food Prices

By Dr Arvind Kumar

The latest figures released by the UN Food and Agriculture Organization (FAO) show that global food prices are at their zenith since the 2008 crisis. International food prices reached their highest level in mid-2008 during the past three decades, igniting one of the worst food crises in recent times, toppling at least one government and pushing more than a billion people into hunger. According to Abdolreza Abbassian, secretary of the Intergovernmental Group on Grains at FAO, the global average price of food – including cereals, cooking oil, meat and dairy products – was 25 percent higher in December 2010 than in December 2009. Although the average prices of cereals such as maize, wheat and rice were 39 percent up from December 2009, they were still 13 percent below the peak reached in June 2008.

Food prices began to climb in the second half of 2010; photo courtesy Erica Silverman/IRIN.

The second half of 2010 witnessed propelling in food prices owing to inclement weather and price volatility. Russia and Ukraine, two of the world’s top wheat producers, were visited by calamities of drought and raging fires and it led to soaring of prices in July 2010. By September 2010 wheat prices had risen by between 60 and 80 percent and Russia banned exports. Bad weather in Canada, prolonged dry conditions in Argentina and floods in Australia also contributed in affecting food prices. Rising fuel prices, which passed the US$90-a-barrel-mark last week, could also have an impact on food production and distribution in 2011.