Rising food prices pose threat

Citing dwindling stocks and only small production increases for the majority of crops, a new United Nations report released yesterday said world food prices are likely to remain high for the rest of this year and into 2012.

The biannual Food Outlook published by the UN Food and Agriculture Organization (FAO) states that the next few months will be critical in determining how the major crops will fare this year.

“The general situation for agricultural crops and food commodities is tight with world prices at stubbornly high levels, posing a threat to many low-income food deficit countries,” according to David Hallam, Director of FAO’s Markets and Trade Division.

The FAO says higher food prices could mean developing countries will see food import costs rise by up to 30 percent. That would mean them spending 18 percent of their total import bills on food this year, compared with the much lower world average of seven percent.

The FAO’s monthly food price index showed that global food prices, which earlier this year soared to levels seen during the 2007-2008 food crisis, dropped by one percent last month.

Overall, the global food-import bill is expected to rise to a record US$1.29 trillion.

The spike in the price of oil has contributed to those increases, since more expensive fuel means the cost of food production and transportation increases.