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Experts warn world food prices set to keep rising

Experts warn world food prices set to keep rising
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Hundreds of people from several political parties held a protest rally in New Delhi on Wednesday against rising prices, especially of food.

It came in the same week that the UN reported that world food prices had reached a 25-year high.

For now good harvests are staving off an immediate crisis, although it is feared the situation in one developing giant could have a devastating domino effect.

In India protesters blame the government. “It’s absolutely unthinkable that a government, knowing that there’s high food inflation, in spite of that, should raise the prices of petrol, which has a cascading impact,” said Brinda Karat, a member of parliament’s upper house from the Communist Party of India.

Extreme climatic conditions, such as floods in Australia and last year’s heatwave in Russia, have increased pressure on the price of wheat and other staple products.

Latest reports taking into account a recent cyclone suggest that Queensland has suffered more than a billion euros worth of damage to crops.

A clamour for democracy and human rights brought revolution in Tunisia. But there and elsewhere in North Africa local food prices were one of the catalysts for unrest.

Experts believe food crises in many of the world’s poorer countries could also have devastating consequences if, as expected, prices keep rising.

“The issue that concerns us is the duration of this price increase – which started so many months ago and is not really giving us any indications that it is going to change dramatically in the future coming months – is long,” said Abdolreza Abbassian, economist and grains expert with the UN Food and Agriculture Organisation. “And this long duration is something I think eventually will bring more food inflation in many countries.”

The UN is now worried about the world’s largest wheat producer. With virtually no exports or imports, China is not usually part of the world food equation.

But with many regions facing their worst drought for decades, it is feared the Chinese could be forced to look elsewhere to feed its people – sending international food prices rocketing even higher.