Global food prices rise in July due to extreme weather

A grasshopper sits on a drought-damaged ear of corn near Council Bluffs, Iowa Drought in the US has hurt crops, and the world's poorest

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Global food prices sharply rebounded in July due to wild swings in weather conditions, a UN food and agricultural body has said.

The rise has fanned fresh fears of a repeat of the 2007-2008 food crisis which hurt the world's poorest.

Untimely rains in Brazil, drought in the US and production difficulties in Russia drove the rally, said the Food and Agriculture Organization (FAO).

Food prices jumped 6% in July from June after falling three months in a row.

The FAO food price index measures the monthly price changes for a basket of food commodities including cereals, oilseeds, dairy, meat and sugar. The index reading in July was still well below the all-time high reached in February 2011.

The Rome-based organisation took the surprise step of publishing the index this month - which it usually does not - due to the exceptional market conditions affected by unusual weather patterns.

Start Quote

There is a potential for a situation to develop like we have back in 2007-2008”

End Quote Abdolreza Abbassian FAO senior economist

Cereal prices surged 17%, while sugar leapt 12% to new highs in July from the previous month after rains hampered sugarcane harvesting in Brazil, the world's largest producer.

Delayed monsoons in India and poor rains in Australia also contributed to higher prices.

'Anything is possible'

"The severe deterioration of maize crop prospects in the US following extensive drought damage pushed up maize prices by almost 33% in July," said the FAO.

The price of rice and dairy was unchanged, although meat fell 1.7% due to a slump in pork prices.

The surge in prices have renewed fears of a food crisis that plagued countries in 2007-2008, sparking violent street protests in countries like Haiti and Egypt.

"There is a potential for a situation to develop like we have back in 2007-2008," said FAO senior economist and grain analyst Abdolreza Abbassian.

"There is an expectation that this time around we will not pursue bad policies and intervene in the market by restrictions, and if that doesn't happen we will not see such a serious situation as 2007-2008. But if those policies get repeated, anything is possible," he added.

Higher food prices hurt the world's poorest countries because it means they will need to pay higher import bills as they do not produce enough food at home.

'Global alarm'

Oxfam said that since the beginning of the year, rising food prices and drought had caused a food crisis in the Sahel sub-region of west and central Africa, affecting more than 18 million people over an area of land as wide as the US.

"This is not some gentle wake-up call - it's the same global alarm that's been screaming at us since 2008," said Hannah Stoddart, Oxfam's head of economic justice policy, regarding the FAO data.

"These latest figures prove yet again that there is something fundamentally flawed in the way we produce and distribute food around the world. For too long our leaders have stood by complacently, while up to a billion people go hungry worldwide," she said. "The time to act is now."

The UK government plans to host a global hunger event on 12 August in London which will also address poverty and malnutrition in children.


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  • rate this

    Comment number 39.

    Nothing to do with the weather! Global physical demand for all commodities is weak.
    However, commodity prices including oil are rising again because the markets are awash with liquidity.
    This liquidity is being provided by global central banks under the deluded misapprehension that Quantitative Easing is a good idea.

  • rate this

    Comment number 38.

    This is just another result of the twin evils of capitalism and corporate globalism - profits before people, and to hell with the consequences.

  • rate this

    Comment number 37.

    I think it's time (well, maybe come springtime) for more city and suburban folk to plant gardens and grow some of their own food. In the US, home food gardens are not very common, so there is significant growth potential there. This will reduce household food expenditures, free some food resources for others around the country and around the globe, and in a small way increase our self-sufficiency.

  • rate this

    Comment number 36.

    Any nation that can feed itself has a big advantage. So a few less golf courses and a few more farms.

  • rate this

    Comment number 35.

    Subsidise the farming industry and this is what you get. Elimination of competition, lack of innovation, thus, lack of growth. Corporate welfare at its worst. Not to mention the anti-GM fruitcases denying disease-resistant crops to those who need it most.

    Yet more cases of good intentions, yet bad practice.

  • rate this

    Comment number 34.

    Please, someone, explain to me what we are doing on Mars (at tremendous cost) when these severe conditions exist on earth? It's not even a little step for man, but a gigantic step for mankind; rather, it a little step into the unknown, & a tremendous step on human hunger & suffering.
    Happenings like this define our humankind.

  • rate this

    Comment number 33.

    The problem of global warming, which is the real story behind the rising price of basic food stuffs, is compounded by the commodity hoarding of ruthless speculators in the name of profit. The same speculators that underwrite the industries causing global warming. Meanwhile the poor go hungry. Time to re-imagine the world & sweep this corrupt, out-dated system into the dustbin of history.

  • rate this

    Comment number 32.

    guess they should turn all those unused sports fields into allotments instead of housing

  • rate this

    Comment number 31.

    'The UK government plans to hold a global hunger event'

    Seems like a bit of an empty gesture when so many countries are already hosting a 'hunger event' on a daily basis.

    I wonder what the 'UK government' thinks it will achieve?

  • rate this

    Comment number 30.

    11. H Jackson "The only thing we can do is expand into the universe somehow, through terraforming or glass domes"

    Total science fiction. To say it's "the only thing we can do" is a true failure of imagination. For the foreseeable future, we're stuck here on a planet with finite resources. We need to figure out how to live on it sustainably. It can be done, but not the way we're doing it today.

  • rate this

    Comment number 29.

    I don't often say this, but this is one instance where trading futures can help stabilise prices, and probably has.

    These have probaly saved some people's lives from starvation.

  • rate this

    Comment number 28.

    Today, Brazil's agricultural minister said this year's crop was the biggest ever in brazilian history, 165.92 milion tons of produce, in 50.81 milion hectares, so what floods are you guys talking about??
    If any of you speaks portuguese here goes the link for the news,
    [Unsuitable/Broken URL removed by Moderator]

  • rate this

    Comment number 27.

    The problem with Food is not so much how much of it there is but by how much its value is inflated by investors who should not be allowed to trade in it.
    This is exactly the same for all commodities....IMO the only people who should be allowed to trade a commodity are people who can take delivery of the item.

  • rate this

    Comment number 26.

    It's all very well blaming markets etc but they're outside our control. The nearer we can get to self sufficiency the better. It's a hedge against spikes in global food prices, cuts down transport costs, brings work to this country and is good for the environment. We haven't done that so far, thus chickens home to roost (unfortunately you can't eat metaphorical chickens!).

  • rate this

    Comment number 25.

    I can't stand when I see an overweight person make a point of buying "low fat cheese" and then stuff themselves with crisps and chocolate. And then I'm at the swimming pool, and there are posters on the wall encouraging "healthy eating" and next to it is a vending machine filled with chocolate bars and fizzy drinks. I would much rather the government encourage home-baking. Quality over quantity.

  • rate this

    Comment number 24.

    those who do not grow there own food are have choice pay those who grow large scale or grow there own. when food is in short supply the seller gets to set the price.

  • rate this

    Comment number 23.

    The leaders of the world need to get together now and agree on ROBIN HOOD TAX. There is no need for people to starve.

    Humans are not an angry, competitive animal nature we are naturally empathic, caring, and altruism is real - let's be kind on a global scale!!!

  • rate this

    Comment number 22.

    There is also the fact there are too many people in the world. What the planet needs is a ruddy good pandemic and knock a couple of billion off . Then there will be enough for all and looking at the wonky climate (snow in Johannesburg??) it may be on it's way soon. Smile everyone life is just so peachy .

  • rate this

    Comment number 21.

    i stocked up on food while prices were low.
    as for the poor who receive food aid there out of luck.
    but maybe they can live off dirt and water.
    Since those countries that produce will keep what they grow for there own needs. those countries that don't produce enough food for there own needs are stuffed.

  • rate this

    Comment number 20.

    . . . we need to decouple ourselves from America, both politically and economically; the financial crisis originated in US; the obesity epidemic originated in the US; the majority of conflicts are either exacerbated by the US or are a result of their foreign policy. America exists purely for America; any apparent altruism always has a benefit for America


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