Quarterly food prices decline, but remain volatile
Global food prices have declined due to increasing supplies and uncertainty about the global economy. However, food prices remain volatile with high annual index of 24 percent, higher than 2010 average.
The first quarter of 2011 witnessed sharp food price increases. However, five consecutive months of decreases at the end of the year drove the World Bank Food Price Index 7 percent below the December 2010 levels, and 14 percent lower than its February peak.
According to the quarterly Food Price Watch report, despite the downward trend over the last few months, global prices of key staples continue to experience volatility. This means average annual prices of wheat, maize and rice will exceed averages for 2010.
Domestic food prices also experienced sharp increases in many countries from December 2010 to December 2011.
The World Bank Groups Vice President for Poverty Reduction and Economic Management, Otaviano Canuto cautioned the worst food price increases may be over but we must remain vigilant.
He says prices of certain foods remain dangerously high in many countries, leaving millions of people at risk of malnutrition and hunger.
Unseasonal increases in cereal prices threaten to deteriorate food insecurity conditions, especially in conflict-affected areas in Africa and across southern Somalia. Prospects for decline in 2012 food prices remain favorable, due to weaker consumer demand as a result of a sluggish global economy. Expected declines in the price of energy and crude oil, and strong forecasts for 2012 food supplies will also help the situation.
Nevertheless some upward price pressures still remain. These include a possible increase in demand for biofuels if oil prices pick up again, very low stock-to-use levels for maize, volatility in oil prices as a result of unrest in producer countries, and weather changes.
Meanwhile the World Bank Group in response to drought in the Horn of Africa is providing $1.88 billion. This is to save lives, improve social protection, and foster economic recovery and drought resilience. Risk management product provided by the International Financial Corporation will also enable $4 billion in protection from volatile food prices for farmers, food producers, and consumers in developing countries.
Another 40 million people in 44 countries are being helped with 1.5 billion dollars in support. The World Bank Group is also boosting spending on agriculture up to $8 billion a year from $4.1 billion in 2008.
Accra, May 17, 2012
Government’s management of revenue generated from the country’s oil and gas resources will today come under intense scrutiny ... 