Food price volatility and high prices are likely to continue and possibly increase, making poor farmers, consumers and countries more vulnerable to poverty and food insecurity, says the latest global hunger report, produced jointly by the UN Food and Agriculture Organization (FAO), the International Fund for Agricultural Development (IFAD) and the World Food Programme (WFP).
ROME -- Food price volatility and high prices are likely to continue and possibly increase, making poor farmers, consumers and countries more vulnerable to poverty and food insecurity, says the latest global hunger report.
Small, import-dependent countries are especially at risk, particularly those in Africa, according to ‘The State of Food Insecurity in the World 2011’ (SOFI), a report produced annually by the three Rome-based UN agencies.
The report, published today, noted that high and volatile food prices are major contributing factors in food insecurity at a global level and a source of grave concern to the international community.
“Demand from consumers in rapidly growing economies will increase, population continues to grow, and further growth in biofuels will place additional demands on the food system,” it said, adding that more frequent extreme weather events could also increase food price volatility.
Long term effect
Price volatility makes smallholder farmers and poor consumers increasingly vulnerable to poverty and hunger. Even short term fluctuations in prices can have a long term effect on development, the report says.
For example, in times of high prices, cutting back on nutritious food in the first 1,000 days of a child’s life can affect mental and physical development and, ultimately, future earning capacity.
FAO's monthly Food Price Index fell 2 percent in September compared to August, to 225 points, mostly because of lower international prices for grains, sugar and oils. The index is now 13 points below the historic peak of 238 reached in February 2011, but still higher than it was this time last year and during the 2007 – 2008 high food prices crisis. (The index, which measures monthly change in the prices of a basket of cereals, oilseed, dairy products, meat and sugar, peaked at 213.5 points in June 2008.)
Rising food prices affect WFP in two ways: it costs us more to purchase food for the hungry and the number of people needing food assistance increases. Every 10 percent increase in the price of our food basket costs us an additional US$200 million a year to buy the same amount of food.
Forward purchasing food while market prices are low is one of the ways in which WFP seeks to minimise the impact on our budget.