MercoPress. South Atlantic News Agency

World Bank food prices index jumps 15% in four months, just below 2008 record

Food prices threaten tens of millions of poor people warns WB president Robert B. Zoellick

Rising food prices have driven an estimated 44 million people into poverty in developing countries since last June as food costs continue to rise to near 2008 levels, according to new World Bank Group numbers released ahead of the G20 Meeting of Finance Ministers and Central Bank Governors in Paris.

“Global food prices are rising to dangerous levels and threaten tens of millions of poor people around the world,” said World Bank Group President Robert B. Zoellick. “The price hike is already pushing millions of people into poverty, and putting stress on the most vulnerable that spends more than half of their income on food.”

According to the latest edition of Food Price Watch, the World Bank’s food price index rose by 15% between October 2010 and January 2011, is 29% above its level a year earlier, and is only 3% below its 2008 peak.

Among grains, global wheat prices have risen the most, doubling between June 2010 and January 2011. Maize prices are about 73% higher, but crucially for many of the world’s poor, rice prices have increased at a slower rate than other grains. Sugar and edible oils have also gone up sharply. Other food items essential for dietary diversity in many countries have increased, such as vegetables in India and China, and beans in some African countries.

According to Food Price Watch, the increase in extreme poverty (under US$1.25 a day) due to the price hike is associated with higher malnutrition, as poorer people eat less and are forced to buy food that is both less expensive and less nutritious.

In contrast to the 2008 food price spike, two factors have prevented even more people falling into poverty this time. One is that good harvests in many African countries have kept prices stable, especially for maize, a key staple. Another is the fact that the increases in global rice prices have been moderate and the outlook for the rice market appears stable.