If you Google the latest headlines, you will see plenty about the high price of food. Globally, however, average prices for major food commodities actually are 11% lower than a year ago, according to the latest edition of the World Bank’s quarterly Food Price Watch. Does this mean the world is out of the danger zone on high food prices? Economist José Cuesta sheds light on the issue.
Food prices have been falling globally since August 2012. Have we turned the corner on the food crisis?
It’s true we’ve seen prices declining in a sustained way, but we’re still only 18% away from that historic peak in 2012. The reasons prices increased in the first place – such as growing demand for food and weather concerns – are still issues, and probably will be in the future.I don’t think that we have turned any corner. Prices seem to be less volatile, and that’s good news. But that doesn’t mean the level of prices hasn’t continued to be high; they are still high.
Photo: © Michael Morris / World Bank
When the World Bank’s Food Price Watch reported last week that severe drought pushed prices of staples such as maize and soybean to an all-time high this summer, people everywhere took notice. What will it mean for the poor in regions most affected by rising prices? What will it mean for us?
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  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.