No end in sight to high food prices, says UN

No end in sight to high food prices, says UN
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First Published: Fri, May 30 2008. 02 10 PM IST
Updated: Fri, May 30 2008. 02 10 PM IST
PTI
United Nations: High food prices, which have sparked protests and riots across the world, will continue over the next decade, the UN has warned and asked countries to put agriculture back on the development agenda.
In a new report, the UN Food and Agriculture Organisation (FAO) and the Organization for Economic Co-operation and Development said current high prices will hit the poor and hungry the hardest and called for the urgent mobilization of humanitarian aid and greater focus on boosting farm output in the longer term.
“Coherent action is urgently needed by the international community to deal with the impact of higher prices on the hungry and poor,” Jacques Diouf, Director-General of the FAO said at a press conference launching the report in Paris.
“Today some 862 million people are suffering from hunger and malnourishment this highlights the need to re-invest in agriculture. It should be clear now that agriculture needs to be put back onto the development agenda.”
The “transitory nature” of some of the factors behind the recent trend meant that prices would fall in due course from record peaks, the report said pointing to “adverse weather conditions in major grain-producing regions”.
However, there was “no reason to believe that this will not recur over the next few years,” it said, adding that commodity prices will continue “substantially above” the levels of the past 10 years.
Using prices corrected for inflation, the report said that over the next decade rice and sugar prices will increase by less than 10%, wheat by less than 20%, butter coarse grains and oilseeds will rise 30%, and vegetable oils over 50%.
High oil prices, changing diets, urbanization, economic growth and expanding populations are pushing food food prices up, according to the report.
The FAO and OECD cite growing demand for bio-fuel as another factor forcing up prices, saying world ethanol production has tripled between 2000 and 2007 and is expected to double again in the next decade.
Climate change, low stock levels and speculation could also add to price volatility.
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First Published: Fri, May 30 2008. 02 10 PM IST