Reuters News is reporting that global food prices rose in March for a third straight month with more hikes to come. This was said by the UN’s food agency said on Thursday, adding to fears of hunger and a new wave of social unrest in poor countries.
Record high prices for staple foods last year were one of the main factors that contributed to the Arab Spring uprisings in the Middle East and North Africa, as well as bread riots in other parts of the world.
The cost of food has risen again this year after coming down from a February 2011 record peak.
The FAO index, which measures monthly price changes for a basket of cereals, oilseeds, dairy, meat and sugar, averaged 215.9 points in March, up from a revised 215.4 points in February, the United Nations’ Food and Agriculture Organisation (FAO) said.
Although below the February 2011 peak of 237.9, the index is still higher than during a food price crisis in 2007-08 that raised global alarm.
“The food crisis has not gone away since then,” said Emilia Casella, spokeswoman for the U.N.’s World Food Programme. “Prices are a big concern and have remained a large reason why people are food insecure.”
The FAO’s senior economist and grain analyst Abdolreza Abbassian told Reuters there was scope for more price rises in the first half of this year, particularly for corn and soybeans, which could also drive up the price of wheat.
Higher food prices mean higher import bills for the poorest countries, which do not produce enough food domestically.
VERY TIGHT SUPPLIES
A U.S. government report last week with lower than expected estimates of grain stocks and reduced soybean and wheat plantings added to concerns about global grain supplies, driving a rally in grain futures.
Stocks of grain in the European Union are set to hit a four-year low by the end of the 2011/12 marketing campaign, with a diminishing crop outlook threatening further drawdowns next season, traders and analysts say.
Strong price swings are expected due to weather changes in major producing countries and more price volatility could come if U.S. farmers decide to plant more soybeans after being lured by high prices, the FAO’s Abbassian said.
“If I were a farmer and I would look at the steep increases that we’ve got since the planting intentions report, I would be a bit more cautious about putting everything into corn and would be considering soybeans also as a good option,” he said.
“We will be 7.2 billion people on earth in 2015, and more than one million have died from starvation in 2011. The situation will not improve, and in fact the contrary will happen,” Pierre Reuland, Interpol’s special representative to the European Union, told a meeting of European security officials in January. “For poor people the struggle for life will not be better than it is today.”
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