Oil, adverse weather pushes global food prices to rise again by 8% – World Bank

On Apr 27, 2012

Global food prices jumped from December 2011 to March 2012 by 8% due to higher oil prices, adverse weather conditions, as well as strong food imports demand from Asia, according to the World Bank’s latest Food Price Watch released April 25, 2012.

According to the quarterly report, prices of all key staples increased between “last December and March of this year, except for rice, due to both abundant supply and strong competition among exporters”. Maize prices increased by 9%, soybean oil by 7%, wheat by 6%, and sugar by 5% as well as crude oil prices by 13%.

The Bank’s Global Food Price Index was only 1% below a year ago and 6% below the February 2011 historic peak. And if the current forecasts for increased food production do not materialize, global food prices could reach higher levels, underscoring the need to remain very vigilant, the World bank warned.

“After four months of consecutive price declines, food prices are on the rise again threatening the food security of millions of people,” said Mr Otaviano Canuto, World Bank Vice President for Poverty Reduction and Economic Management (PREM).

He adds that “Putting food first must remain a priority for the international community and in our work in developing countries.”

The World Bank indicated that domestic food prices remain high, especially in Africa as the result of a combination of large food imports and local factors, such as trade restrictions between neighbors, hoarding, civil unrest, high fuel transportation costs and bad weather conditions.

In a global context, it said domestic food price increases have been larger than price declines across countries.

The Bank was optimistic that production outlook remains strong for 2012/13.