Higher oil prices, adverse weather, and Asian demand drove global food prices up 8% in the first three months of 2012, impacting most major commodity ingredients, according to a new report from the World Bank.
In its latest Food Price Watch report, issued April 25, the World Bank said that the prices of all key staples increased during the first quarter, except for rice, for which there was “abundant supply” and strong competition among exporters. Meanwhile, maize was up 9%, soybean oil 7%, wheat 6% and sugar 5%, it said.
“If the current forecasts for increased food production do not materialize, global food prices could reach higher levels, underscoring the need to remain very vigilant,” it said.
The World Bank’s Global Food Price Index was only 1% below a year ago and 6% below February 2011’s historic peak, it added. However, production forecasts remain strong, and if they prove to be correct, price pressures could be alleviated.
In addition, maize use for ethanol production in the United States has slowed down, remaining flat in 2011-12 after years of double-digit annual growth, and the Eurozone currency crisis is also contributing to keep demand, and therefore price pressures, under control.
“Should these factors stick for a while, they might prevent a continued food price upsurge,” the report said.
Although higher food prices continue to affect food manufacturers and consumers in the United States, and around the world, the World Bank’s vice president for poverty reduction and economic management Otaviano Canuto said that food would need to remain a top priority for the World Bank’s work in developing countries in particular.
“After four months of consecutive price declines, food prices are on the rise again threatening the food security of millions of people,” he said.