Global food prices fall, but remain high

Gurjit Degun
3 December 2013

Global food prices saw a 6 per cent decline between June and October but still remain high, according to the World Bank’s latest Food Price Watch report.

The Bank’s food price index in October 2013 was 12 per cent lower than last year, and 16 per cent below the all-time high in August 2012. “Despite this decline, however, prices remain close to their all-time high,” the report said.

The Food Price Watch attributed an increase in the price of wheat to stronger demand, especially from China, a weaker US dollar, and increasing concerns over adverse weather conditions. It said that weather-related concerns in Brazil, Paraguay, Argentina, Ukraine and Russia might further drive up the already “tight” wheat prices over the next few months.

The price of grains was 19 per cent lower in October than in June.

But the report added rice and maize stocks continue to be “robust and are expected to remain that way through the end of the year”. The price of internationally traded maize fell by 32 per cent, and prices of rice fell by 16 per cent between June and October.

The Bank’s average price of crude oil rose by 6 per cent in the last quarter, and the price of sugar in October alone was 7 per cent up.

“Sustained declines in prices are welcome – we have a lot to be pleased about,” said Ana Revenga, acting vice president for the poverty reduction and economic management network at the World Bank.

“But these gains are fragile. Persistent concerns around erratic weather or currency fluctuations keep us far from claiming victory over food prices. We need to continue to pay close attention, since this progress can quickly be reversed if concerns become reality."

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