Enjoy it while you can - food prices are going to rise
Global prices of food could climbby as much as 40 per cent in the coming decade, as the global
population continues to surge, a new United Nations Food and
Agriculture Organization (target=”_blank”>FAO) report
released today says.
The
target=”_blank”>Agriculture Outlook
2010-19 anticipates that wheat and coarse grain
prices could jump to levels of between 15 and 40 per cent higher
than they were between 1997 and 2006, while vegetable oil and dairy
prices are also projected to rise by more than 40 per cent.
Spikes in livestock prices are not expected to be as marked,
even in the face rising global demand for meat which is set to
outpace demand for other commodities as some segments of the
population in emerging economies alter their dietary habits due to
increased wealth.
The report, jointly published with the Organization for Economic
Cooperation and Development (OECD), notes that global agricultural
output will ease in the next decade, but food production will meet
the demand generated by surging population growth by 2050.
However, even if enough food is produced to feed the world’s
people, recent price spikes and the economic crisis have resulted
in stepped-up hunger and food insecurity, with some one billion
people now believed to be undernourished.
The publication calls for enhanced agricultural production and
productivity as well as a well-functioning, rules-based trading
system to spur fair competition and ensure that food can move from
surplus to deficit areas.
“The role of developing countries in international markets is
growing quickly, and as their impact grows, their policies also
have an increasing bearing on conditions in global markets,” FAO
Director-General Jacques Diouf said at the report’s
launch in Rome.
As a result, these nations’ role and contribution is global
policy is crucial, he stressed, urging a more global scope to
discussions on fighting hunger and malnutrition.
Climate change:
There is a broad scientific consensus that less-resilient
agricultural production areas will suffer the most, as temperatures
rise further, for example in semitropical and tropical latitudes,
and as already dry regions face even drier conditions. Climate
change may also increase food safety risks that might result from
heat-related and water borne diseases with temperatures rising and
more flooding. Production variability and uncertainty of supplies
are expected to rise as a result of likely increases in the
frequency of extreme events such as droughts and floods. In more
extreme cases, production zones might shift. It was also recognised
that agriculture will be required to make an important contribution
to reducing greenhouse gas emissions.
Average crop prices over the next ten
years for the commodities covered in this Outlook are projected to
be above the levels of the decade prior to the 2007/08 peaks, in
both nominal and real terms (adjusted for inflation).
Average wheat and coarse grain prices
are projected to be nearly 15-40% higher in real terms relative to
1997-2006, while for vegetable oils real prices are expected to be
more than 40% higher. World sugar prices to 2019 will also be above
the average of the previous decade but well below the 29-year highs
experienced at the end of 2009.
