Soaring Food Prices

After decades of steady reductions in the price of basic foods, the current decade has seen a drastic change in this tendency. According to FAO, world-wide food prices rose nearly 40 percent from January to December 2007. FAO estimates that the high prices of food will continue for about ten more years.

The increase in demand in large economies like India and China, reduced production because of droughts, floods and related natural disasters due to climate change, the high price of oil and the related high costs of food transport and fertilizers, the development of the new industry of biofuels, combined with historically low levels of food reserves and greater consumption of meat and dairy products in emerging countries, have hit the price of food everywhere in the world. At the same time, economic speculation has increased food price volatility.

Urgent measures are required to make sure that the adverse short term effects of food price increases do not affect to poorest in a more alarming form, declared Jacques Diouf, the Director General of FAO. "The price of food world-wide has increased by up to 45 percent in the last nine months and there are serious shortages of rice, wheat and corn", said Diouf.