FAO expects new “hunger revolutions†due to food price increase
Global food prices keep increasing.
Oil increasing price due to the Libyan crisis may complicate the situation as global food prices increased for the eighth consecutive month in February, Food and Agriculture Organization of the United Nations (FAO) warned on Thursday.
- The FAO said prices of all commodity groups monitored are rising again, except for sugar. It expects a tightening of the global cereal supply and demand balance in 2010/11.
- Oil prices increased on Friday. Brent oil increased to almost 116 dollars a barrel as fighting escalates and protests take place in the oil producing east region in Saudi Arabia. It is Shias’ principal, region. Oil market is concerned about possible explosion in the region.
- The Cereal Price Index includes prices of main food staples such as wheat, rice and maize. It rose by 3.7 percent in February (254 points), the highest level since July 2008.
- In 2010, Algeria’s imports exceeded 5.2 million tons of wheat compared to 2.7 million tons in 2009. The government imported about 2.2 million tons of wheat early in 2011 to face any possible protests.
- “In the face of a growing demand and a decline in world cereal production in 2010, global cereal stocks this year are expected to fall sharply because of a decline in inventories of wheat and coarse grains. International cereal prices have increased sharply with export prices of major grains up at least 70 percent from February last year,” says the FAO.
- Director of the organisation’s Trade and Market Division David Hallam believes that unexpected oil price spikes could further exacerbate an already precarious situation in food markets.
- “This adds even more uncertainty concerning the price outlook just as plantings for crops in some of the major growing regions are about to start,” he said.