World food prices at all-time high due to extreme weather

Highlights

The United Nations Food and Agricultural Organization said last week that world food prices hit a record high in January, driven by huge increases in the prices of wheat, corn, sugar and oils. And prices are expected to keep rising in the coming months. That’s bad news for consumers and governments.

Surging prices in 2007 and 2008 led to protests and unrest in scores of countries. And last month, Algerians rioted again over the cost of flour and sugar, which had doubled in recent months. Here in the U.S., after a stretch of relative stability in food prices, economists say shoppers should expect to see a 4 percent rise in cost at the supermarket checkout this year.

So what’s behind this latest global food crisis and what’s being done about it? To find out, we’ve called Abdolreza Abbassian. He’s a senior economist with the Food and Agricultural Organization, the FAO. And he’s with us from the organization’s headquarters in Rome. Also with us here in our Washington, D.C. studio, NPR senior business editor Marilyn Geewax. Thank you both so much for joining us.

MARILYN GEEWAX: Hello.

Mr. ABDOLREZA ABBASSIAN (Senior Economist, Food and Agricultural Organization): Thank you for invitation.

MARTIN: Mr. Abbassian, I’ll start with you, what exactly has contributed to the sharp rise in food prices?

Mr. ABBASSIAN: Well, the most important factor was weather developments in 2010. We had unfavorable weather during critical growing period or at harvest like the drought in Russia, you know, the rains in U.S. In north Europe we had, as you know, the rains and floods in Australia. So, weather reduced the yields or cut production here and there. And all of this happened while demand continue to increase. So the net result, you know, in any market is when you have demand rising and supply not keeping pace is for prices to rise.

The source article Skyrocketing Prices Point To Looming Global Food Crisis : NPR was published February 7, 2011 by National Public Radio .

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