In an online briefing of world media this week, the FAO has said the record high food prices being experienced around the globe are likely to continue throughout 2011. Prices have been at record highs for the first two months of the year, and according to FAO there is more chance of them increasing than of a decline in coming months.
Speaking on the matter of grain prices, especially wheat, FAO economist, Abdolreza Abbassian summarised what is driving food prices to such high levels. It is not poor harvests alone, such as those that have driven up wheat prices, but increasing costs such as oil and transport, and the influence of other pressures, such as increased demand for maize for biofuel.
“We will get an increase in production [in 2011] but not sufficient to ease the market. High, volatile prices will continue in 2011 and even in 2012,” he said.
Of all grains, only rice has maintained any sort of stability, with prices up just 5% in the past 12 months, compared with 92% for maize and 60% for wheat.
Compounding the problem is high oil prices being exacerbated by Middle Eastern politics, which also puts pressure on alternative uses for grain crops on the food market.
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