Food Prices Rise Again on Costly Oil, Adverse Weather

Global food prices increased by 8 percent from December 2011 to March 2012, mostly a result of higher oil prices, adverse weather conditions –  and Asia’s strong demand for food imports, according to the World Bank’s latest Food Price Watch.
The organization’s Global Food Price Index was only 1 percent below a year ago and 6 percent below the February 2011 historic peak.
The December-March increases mark a reverse of a downward trend that began in October 2011.
If the current forecasts for increased food production do not materialize, global food prices could reach higher levels.
“After four months of consecutive price declines, food prices are on the rise again threatening the food security of millions of people,” said Otaviano Canuto, World Bank’s vice president for Poverty Reduction and Economic Management (PREM). “Putting food first must remain a priority for the international community and in our work in developing countries.”
Prices of all key staples increased between last December and March of this year, except for rice, which saw abundant supply and strong competition among exporters.
Maize prices increased by 9 percent, soybean oil by 7 percent, wheat by 6 percent, and sugar by 5 percent. Crude oil prices rose by 13 percent.
Production projections remain strong for the reminder of 2012 and 2013 as a number of factors have kept pressures on prices.
Record prices in late 2010 and early 2011 led to increased production of major crops worldwide, and are a key factor in the strong projections through next year.

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