Food prices to remain high for years: FAO

Food prices to remain high for years: FAO
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First Published: Sat, May 24 2008. 12 27 AM IST
Updated: Sat, May 24 2008. 12 27 AM IST
Rome: Skyrocketing world rice prices that have tripled in Asia over the course of the year may come down, but overall food prices will remain high for years to come, a UN food agency warned on Thursday.
High oil prices, growing demand, flawed trade policies, panic buying and speculation have sent food prices soaring, trigging protests from Africa to Asia and raising fears that millions more will go hungry and suffer malnutrition.
The Food and Agriculture Organization (FAO) said it had some good news: The world prices of most agriculture commodities have started to drop. The bad news: The prices are unlikely to fall back to pre-2007 levels, the agency said in a report Thursday.
“We are facing the risk that the number of hungry will increase by many more millions of people,” said Hafez Ghanem, assistant director-general of FAO.
Conditions on the global rice market could ease as new crops are harvested around the world. But price pressures will remain high until at least October or November, when the bulk of this year’s paddy crops reach the market, the report said. “Stock levels are low and you need several good seasons to replenish them,” Ghanem said. “There will be some improvement, but we don’t expect a major change.”
Internationally, rice prices skyrocketed by about 76% from December to April while overall food prices have risen 83% in three years, according to the World Bank. In Asia, rice prices have tripled this year, with the regional benchmark hitting $1,038 (Rs44,841) a tonne on Wednesday for Thai 100% grade B white rice.
FAO said the price pressure could ease further if producing countries such as India relax export restrictions on rice.
In Geneva, the UN Human Rights Council debated a Cuban resolution, which said nations “have a primary obligation to make their best efforts to meet the vital food needs of their population.”
The international community, meanwhile, must provide poorer nations with food aid and assistance so that farmers can increase food production and improve “food crop rehabilitation,” the draft resolution says.
FAO is forecasting an increase of 3.8% in this year’s cereal production compared with last year, assuming favourable weather. Tight wheat supply is likely to improve the most, the agency said. Milk, sugar and meat production are also expected to grow.
Recently, FAO said rice production is expected to hit a new record of 666 million tonnes (mt) worldwide, a global increase of 2.3%. Production in Asia is forecast to rise to 605 mt from 600mt.
Bradley S. Klapper in Geneva, Switzerland, and Sadibou Marone in Dakar, Senegal contributed to this story.
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First Published: Sat, May 24 2008. 12 27 AM IST
More Topics: FAO | Oil | Price | Money Matters | Commodities |