World Bank:Food Prices Remain High

A new report from the World Bank confirms what many of us already feared: the cost of food is getting higher. And, typically, it's the world's poorest that are suffering. Dominic Swire has the report.

Drought, war, political instability, climate change. These are all factors driving up the price of food. The latest Food Price Watch report from the World Bank says global food prices in July were 33 percent higher than one year ago. Senior economist Jose Cuesta was the report's lead author:

"To the extent that food inflation affects overall inflation. That means the cost of living of everyone is going to increase, and of course the poor will be hit hardest."

The report says staple food like maize, sugar and soybean oil are all over 50 percent more expensive than last year. Africa is worst affected. But China's also feeling the pinch.

Qu Baoxiang is a researcher at the Chinese Academy of Agricultural Sciences. She says in China it's the cost of production that's driving prices up.

"The prices of raw materials have risen. The prices of diesel oil, fertilizer, seeds have grown, so the production cost has grown. In addition, labor costs are rising."

Chinese food prices in July this year were almost 15 percent more expensive than in 2010. The cost of meat and poultry rose over 33 percent during the same period. But Qu Baoxiang says these rises may be an exception.

"Of course, the price cannot keep rising forever. The rise of some food prices don't follow any patterns. Special circumstances also impact food prices. After a big rain in Beijing, the price of vegetables may rise, but this is a short term trend."

However, Jose Cuesta from the World Bank says the global food situation remains in a precarious position. Low food stocks, growing demand from an ever bigger global population, and volatile oil prices all mean another food crisis is likely.

"Unless we deal with these underlying factors we are prone to these disasters to happen if factors like a severe climatic event takes place."

The World Bank has invested billions of dollars to increase global food security. But addressing the deeper causes such as political instability and climate change may take more than just money.

For CRI, I'm Dominic Swire.