World food prices continue climbing

MEXICO CITY – If you’re seeing your grocery bill go up, you’re not alone.

From subsistence farmers eating rice in Ecuador to gourmets feasting on escargot in France, consumers worldwide face rising food prices in what analysts call a perfect storm of conditions. Freak weather is a factor.But so are dramatic changes in the global economy, including higher oil prices, lower food reserves and growing consumer demand in China and India.The world’s poorest nations still harbour the greatest hunger risk.Clashes over bread in Egypt killed at least two people last week, and similar food riots broke out in Burkina Faso and Cameroon earlier this month.But food protests now crop up even in Italy.And while the price of spaghetti has doubled in Haiti, the cost of miso is packing a hit in Japan.”It’s not likely that prices will go back to as low as we’re used to,” said Abdolreza Abbassian, economist and secretary of the Intergovernmental Group for Grains for the UN Food and Agriculture Organisation (FAO).”Currently if you’re in Haiti, unless the government is subsidising consumers, consumers have no choice but to cut consumption.It’s a very brutal scenario, but that’s what it is.”REVOLUTION OF THE HUNGRY In the long term, prices are expected to stabilise.Farmers will grow more grain for both fuel and food and eventually bring prices down.Already this is happening with wheat, with more crops to be planted in the US, Canada and Europe in the coming year.However, consumers still face at least 10 years of more expensive food, according to preliminary FAO projections.Among the driving forces are petroleum prices, which increase the cost of everything from fertilisers to transport to food processing.Rising demand for meat and dairy in rapidly developing countries such as China and India is sending up the cost of grain, used for cattle feed, as is the demand for raw materials to make biofuels.What’s rare is that the spikes are hitting all major foods in most countries at once.Food prices rose four per cent in the US last year, the highest rise since 1990, and are expected to climb as much again this year, according to the US Department of Agriculture.As of December, 37 countries faced food crises, and 20 had imposed some sort of food-price controls.For many, it’s a disaster.The UN’s World Food Programme says it’s facing a US$500 million shortfall in funding this year to feed 89 million needy people.In Egypt, where bread is up 35 per cent and cooking oil 26 per cent, the government recently proposed ending food subsidies and replacing them with cash payouts to the needy.But the plan was put on hold after it sparked public uproar.”A revolution of the hungry is in the offing,” said Mohammed el-Askalani of Citizens Against the High Cost of Living, a protest group established to lobby against ending the subsidies.In China, the price hikes are both a burden and a boon.Per capita meat consumption has increased 150 per cent since 1980, so Zhou Jian decided six months ago to switch from selling auto parts to pork.The price of pork has jumped 58 per cent in the past year, yet every morning housewives and domestics still crowd his Shanghai shop, and more customers order choice cuts.Meanwhile, record oil prices have boosted the cost of fertiliser and freight for bulk commodities – up 80 per cent in 2007 over 2006.The oil spike has also turned up the pressure for countries to switch to biofuels, which the FAO says will drive up the cost of corn, sugar and soybeans “for many more years to come.”In Japan, the ethanol boom is hitting the country in mayonnaise and miso, two important culinary ingredients, as biofuels production pushes up the price of cooking oil and soybeans.Italians are feeling the pinch in pasta, with consumer groups staging a one-day strike in September against a food deeply intertwined with national identity.Italians eat an estimated 60 pounds of pasta per capita a year.In decades past, farm subsidies and support programmes allowed major grain exporting countries to hold large surpluses, which could be tapped during food shortages to keep prices down.But new liberal trade policies have made agricultural production much more responsive to market demands – putting global food reserves at their lowest in a quarter century.Without reserves, bad weather and poor harvests now have a bigger impact on prices.”The market is extremely nervous.With the slightest news about bad weather, the market reacts,” said economist Abbassian.That means that a drought in Australia and flooding in Argentina, two of the world’s largest suppliers of industrial milk and butter, sent the price of butter in France soaring 37 per cent from 2006 to 2007.The same climate crises sparked a 21 per cent rise in the cost of milk, which with butter makes another famous French food item – the croissant.Panavi, a pastry and bread supplier, has raised retail prices of croissants and pain au chocolat by six to 15 per cent.GLOBAL CRISES Food costs worldwide spiked 23 per cent from 2006 to 2007, according to the FAO.Grains went up 42 per cent, oils 50 per cent and dairy 80 per cent.Economists say that for the short term, government bailouts will have to be part of the answer to keep unrest at a minimum.In recent weeks, rising food prices sparked riots in the West African nations of Burkina Faso, where mobs torched buildings, and Cameroon, where at least four people died.Ukraine and Russia imposed export restrictions on wheat, causing tight supplies and higher prices for importing countries.Partly because of the cost of imported wheat, Peru’s military has begun eating bread made from potato flour, a native crop.But in countries like Burkina Faso, the crisis is immediate.Days after the riots, Pascaline Ouédraogo wandered the market in the capital, Ouagadougou, looking to buy meat and vegetables.She said a good meal cost 1 000 francs not long ago.Now she needs twice that.”The more prices go up, the less there is to meet their needs,” she said of her three children, all in secondary school.”You wonder if it’s the government or the businesses that are behind the price hikes.”Irène Belem, a 25-year-old with twins, struggles to buy milk, which has gone up 57 per cent in recent weeks.”We knew we were poor before,” she said, “but now it’s worse than poverty.”Nampa-APFreak weather is a factor.But so are dramatic changes in the global economy, including higher oil prices, lower food reserves and growing consumer demand in China and India.The world’s poorest nations still harbour the greatest hunger risk.Clashes over bread in Egypt killed at least two people last week, and similar food riots broke out in Burkina Faso and Cameroon earlier this month.But food protests now crop up even in Italy.And while the price of spaghetti has doubled in Haiti, the cost of miso is packing a hit in Japan.”It’s not likely that prices will go back to as low as we’re used to,” said Abdolreza Abbassian, economist and secretary of the Intergovernmental Group for Grains for the UN Food and Agriculture Organisation (FAO).”Currently if you’re in Haiti, unless the government is subsidising consumers, consumers have no choice but to cut consumption.It’s a very brutal scenario, but that’s what it is.”REVOLUTION OF THE HUNGRY In the long term, prices are expected to stabilise.Farmers will grow more grain for both fuel and food and eventually bring prices down.Already this is happening with wheat, with more crops to be planted in the US, Canada and Europe in the coming year.However, consumers still face at least 10 years of more expensive food, according to preliminary FAO projections.Among the driving forces are petroleum prices, which increase the cost of everything from fertilisers to transport to food processing.Rising demand for meat and dairy in rapidly developing countries such as China and India is sending up the cost of grain, used for cattle feed, as is the demand for raw materials to make biofuels.What’s rare is that the spikes are hitting all major foods in most countries at once.Food prices rose four per cent in the US last year, the highest rise since 1990, and are expected to climb as much again this year, according to the US Department of Agriculture.As of December, 37 countries faced food crises, and 20 had imposed some sort of food-price controls.For many, it’s a disaster.The UN’s World Food Programme says it’s facing a US$500 million shortfall in funding this year to feed 89 million needy people.In Egypt, where bread is up 35 per cent and cooking oil 26 per cent, the government recently proposed ending food subsidies and replacing them with cash payouts to the needy.But the plan was put on hold after it sparked public uproar.”A revolution of the hungry is in the offing,” said Mohammed el-Askalani of Citizens Against the High Cost of Living, a protest group established to lobby against ending the subsidies.In China, the price hikes are both a burden and a boon.Per capita meat consumption has increased 150 per cent since 1980, so Zhou Jian decided six months ago to switch from selling auto parts to pork.The price of pork has jumped 58 per cent in the past year, yet every morning housewives and domestics still crowd his Shanghai shop, and more customers order choice cuts.Meanwhile, record oil prices have boosted the cost of fertiliser and freight for bulk commodities – up 80 per cent in 2007 over 2006.The oil spike has also turned up the pressure for countries to switch to biofuels, which the FAO says will drive up the cost of corn, sugar and soybeans “for many more years to come.”In Japan, the ethanol boom is hitting the country in mayonnaise and miso, two important culinary ingredients, as biofuels production pushes up the price of cooking oil and soybeans.Italians are feeling the pinch in pasta, with consumer groups staging a one-day strike in September against a food deeply intertwined with national identity.Italians eat an estimated 60 pounds of pasta per capita a year.In decades past, farm subsidies and support programmes allowed major grain exporting countries to hold large surpluses, which could be tapped during food shortages to keep prices down.But new liberal trade policies have made agricultural production much more responsive to market demands – putting global food reserves at their lowest in a quarter century.Without reserves, bad weather and poor harvests now have a bigger impact on prices.”The market is extremely nervous.With the slightest news about bad weather, the market reacts,” said economist Abbassian.That means that a drought in Australia and flooding in Argentina, two of the world’s largest suppliers of industrial milk and butter, sent the price of butter in France soaring 37 per cent from 2006 to 2007.The same climate crises sparked a 21 per cent rise in the cost of milk, which with butter makes another famous French food item – the croissant.Panavi, a pastry and bread supplier, has raised retail prices of croissants and pain au chocolat by six to 15 per cent.GLOBAL CRISES Food costs worldwide spiked 23 per cent from 2006 to 2007, according to the FAO.Grains went up 42 per cent, oils 50 per cent and dairy 80 per cent.Economists say that for the short term, government bailouts will have to be part of the answer to keep unrest at a minimum.In recent weeks, rising food prices sparked riots in the West African nations of Burkina Faso, where mobs torched buildings, and Cameroon, where at least four people died.Ukraine and Russia imposed export restrictions on wheat, causing tight supplies and higher prices for importing countries.Partly because of the cost of imported wheat, Peru’s military has begun eating bread made from potato flour, a native crop.But in countries like Burkina Faso, the crisis is immediate.Days after the riots, Pascaline Ouédraogo wandered the market in the capital, Ouagadougou, looking to buy meat and vegetables.She said a good meal cost 1 000 francs not long ago.Now she needs twice that.”The more prices go up, the less there is to meet their needs,” she said of her three children, all in secondary school.”You wonder if it’s the government or the businesses that are behind the price hikes.”Irène Belem, a 25-year-old with twins, struggles to buy milk, which has gone up 57 per cent in recent weeks.”We knew we were poor before,” she said, “but now it’s worse than poverty.”Nampa-AP