UN: Rising Food Prices Likely to Persist
Friday April 11, 10:47 am ET
By Marta Falconi, Associated Press Writer
UN Food Agency Says Soaring Food Prices Likely to Persist
ROME (AP) -- Soaring food prices that have sparked unrest around the world are likely to persist despite an expected increase in production, threatening millions of people worldwide who live on a dollar or less a day, a U.N. agency said Friday.
Prices of bread, rice, milk, oil and other basic foodstuffs have sharply increased in the past months in many developing countries, according to a report by the Rome-based Food and Agriculture Organization. Prices of wheat and rice have doubled compared with last year, while those of maize are more than a third higher.
Cereal prices have risen as a result of steady demand, especially from China and India, supply shortages and new export restrictions, FAO said.
Even though world cereal production is expected to increase this year by 2.6 percent to a record 2.16 billion tons, experts say this is going to have little impact on the prices.
"All indications we have is that this is not a short-term effect ... where the first year you have price increases and the following year there is an increase of supply that brings the prices down," FAO Director-General Jacques Diouf said at a news conference.
Experts say price speculation and market failures will likely reduce the effect of increased production.
However, the "Crop Prospects and Food Situation" report says that expected growth in production, especially in wheat and rice, could at least ease the tight supply situation worldwide.
FAO said that farmers in developing countries should be granted better access to fertilizers, seeds and animal feed to increase local food production.
Surging food prices, further stoked by rising fuel costs, have triggered protests around the world in recent days. The increases hit poor people hardest, as food represents as much as 60-80 percent of consumer spending in developing nations, compared with about 10-20 percent in industrialized countries, the U.N. agency said.
Two days of rioting in Egypt this week killed one person. Violence wracked Haiti, where demonstrations over rising food prices led to looting and clashes with police.
In Pakistan and Thailand, army troops have been deployed to prevent seizing of food from fields and warehouses, the agency said.
"People are dying because of their reaction to the situation. People will not be sitting dying of starvation, they will react," Diouf said.
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