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August 2012

Food Prices Are Soaring: 5 Questions for Economist José Cuesta

Karin Rives's picture

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Rice grains in bowl. Photo: Arne Hoel | The World Bank

Photo Credit: Arne Hoel/World Bank

The numbers are jarring: Global prices for key food staples such as corn and soybean were at an all-time high in July 2012, with corn rising 25 percent and soybeans 17 percent in a single month.

Globally, food prices jumped 7 percent between April and July. In some countries, people now pay more than twice as much for sorghum [1] as they did a year earlier, the latest issue of the World Bank’s Food Price Watch shows.

This is expected to hit certain regions with high food imports, such as the Middle East and much of Africa, especially hard.

We’re looking at a significant price shock, but does that mean we’re headed for a food crisis similar to the one we experienced in 2008? World Bank economist José Cuesta, the author of the quarterly Food Price Watch report, gives his perspective on the situation.

Longreads: The Way Out of the Food Crisis, Extreme Heat and Global Warming, London 2012 Bridges Divide, Combating Ebola

Donna Barne's picture

Find a good longread on development? Tweet it to @worldbank with the hashtag #longreads.

 

Food crisis warnings are getting louder, with many urging action to head off a repeat of 2007-08’s soaring prices and shortages. The Hindu lists driving forces behind food crises and “corrective steps” in “The Looming Global Crisis and the Way Out.” The story suggests a food crisis is no longer a “freakish phenomenon” in the same way extreme weather is no longer disconnected from global warming. Hot, very hot, and extremely hot summer weather has become more common since 1951, according to research by the National Aeronautics and Space Administration. NASA includes a visualization of temperature changes through the decades in “Research Links Extreme Summer Heat Events to Global Warming.” The just-wrapped London Olympics that dominated the Twittersphere for two weeks wasn’t a mere sporting event, argues The Guardian in “Briefly But Gloriously, London 2012 Bridged the Divide.” The Games at times demonstrated the power to “transcend negative stereotypes and transform perceptions” of developing countries. With concern over an Ebola Virus outbreak easing in Uganda, Development Policy Blog interviews epidemiologist Dr. Kamalini Lokuge, a veteran of responses of Ebola outbreaks, before her trip to the stricken area.

Timing Is Everything: Are We Heading to a New Global Food Price Crisis?

José Cuesta's picture

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Today the world seems to hold its breath again amidst the sudden hike in food prices caused by a historical drought in the US and lack of rain in Eastern Europe.[1] It is a thorny task to predict whether the very recent increases in food prices will unfold into magnitude of the crises seen in 2007-08 and again in 2010-2011: differences between now and then in the price of energy, a critical driver of food prices, give a reason for optimism; as does the hope that governments now better understand the painful consequences of some panic policies that have been put in place during previous episodes. On the other hand, months of volatility in global food prices, low food stocks and food security crisis alerts in parts of East and West Africa all paint a gloomy picture.

Longreads: Future Foods, Car Index, Mexico's Middle Class, Gen U and Africa's Era of Unemployment

Donna Barne's picture

Find a good longread on development? Tweet it to @worldbank with the hashtag #longreads.

 

Amid Olympics chatter, concern continues to grow over extreme weather and rising food prices, with many tweeting this week about IRIN’s “Food: Price Shock Hotspots.” BBC News Magazine  looks at possible future climate-friendly food stuffs —including insects, lab-grown meat, and algae—in “Future Foods: What Will We Be Eating in 20 Year’s Time?” Demand for protein is expected to expand along with the global middle class—which may be as large as 600 million people in G20 developing countries, according to a Carnegie Endowment paper, "In Search of the Global Middle Class." Authors Uri Dadush and Shimelse Ali argue their "Car Index" of the number of cars in circulation provides "a relatively good measure of the number of middle-class households." A  BRIC economy is the subject of the Washington Post’s "Returning Migrants Boost Mexico’s Middle Class" -- a look at how immigrants’ savings are being used back home. In Africa, progress could be hampered by jobless growth and growing numbers of jobless young people, according to "Generation U – Africa’s Era of Unemployment."