Record-high food prices could go higher, UN warns
CTV.ca News Staff
Published Thursday, January 6, 2011 6:47PM EST
The United Nations' food agency is warning that the price of food is at an all-time high, and appears set to climb even higher.
According to the latest food price index released by the UN's Food and Agriculture Organization, the monthly tally for its standard food basket of 55 items including cereals, oilseeds, dairy, meat and sugar was 215 points in December. That was up from 205 points the month before, and almost two points higher than its record peak in June of 2008.
Since farmers in Canada, Ukraine and Russia suffered a poor harvest last year, the index has risen steadily in each of the last six months. And recent dry weather in Argentina and flooding in Australia have seen the price of soy, corn and wheat commodity crops jump by double digits in the last month alone.
Other commodities are up too, including sugar which is now commanding its highest prices in 30 years.
In 2008, rising fuel prices, weather-related crop problems and increasing demand from emerging economies such as China and India, conspired to raise food prices.
The resulting crisis saw riots erupt in dozens of countries worldwide, including Bangladesh, Cameroon, Haiti, and Somalia. Several countries, including India, Egypt, and Indonesia responded by banning exports of rice.
While those factors may not all be present to the same degree this year -- oil is nowhere near its $145 a barrel peak, for instance -- the UN's food agency warns that the risk remains. That's because, unlike developed countries where food expenditures comprise a smaller proportion of household budgets, spiking food-cost inflation can have devastating effects on those living in the world's poorest economies.
Spurred by sudden hikes in the price of milk, sugar and flour in recent days, youths took to the streets of the Algerian capital Algiers on Thursday setting tires and buildings on fire and throwing stones at police.
"They are right, these young people. They have no job, no housing, no visa (for other countries) and now not even bread or milk," said Amara Ourab, a resident of the working-class neighborhood of Bab el-Oued where the violence led officials to shut schools and shops early.
Anticipating a global population of 9.1 billion people by 2050, the UN has warned that international food production must rise by 70 per cent to meet the growing demand.
With files from The Associated Press