World’s poorest face soaring food prices

World’s poorest face soaring food prices

INTERNATIONAL NEWS

Sep 23rd 2011, 10:23

Report warns new round of food inflation with severe hikes in the price of basic foodstuffs is plunging many of the world’s poorest people into deeper poverty and into situations of severe hunger and malnutrition 

A new round of food inflation with severe hikes in the price of basic foodstuffs is plunging many of the world’s poorest people into deeper poverty and into situations of severe hunger and malnutrition, warns a report by the International Federation of Red Cross and Red Crescent Societies (IFRC) released yesterday.

The IFRC report follows a forecast from the South African National Agricultural Marketing Council that food inflation is to rise at a faster rate from next month to November.

"Higher commodity prices and increasing costs in the food value chain are gradually working their way into food prices, and, given the typical lag between producer and consumer prices, it is likely that food prices will increase at a faster rate over the outlook period," the marketing council said this month.

The IFRC report said the world’s poorest were at serious risk from rocketing food prices and volatile global markets. Among the foods worst affected were rice, maize, wheat, oil, sugar and salt.

Earlier this month, Agriculture, Forestry and Fisheries Minister Tina Joemat-Pettersson complained at the Food and Allied Workers Union congress in Johannesburg about food price increases in SA, particularly for wheat and maize . She was reacting to the marketing council’s quarterly food monitor, which warned that food and beverage inflation from July last year to July this year was at its highest level since July 2009. The food inflation rate for this period was 7,4%.

The IFRC’s World Disasters Report 2011, launched in Geneva, Switzerland, yesterday, also found that "food prices were hitting the alarming highs of the 2008 crisis".

"It’s profoundly concerning that we seem to be going backwards in terms of ensuring basic food is available and affordable," IFRC secretary-general Bekele Geleta said.

Among the factors fuelling the latest round of food inflation identified by the report were speculative commodity trading, rapidly growing populations, climate change and a sharp decrease in domestic agricultural production due to a lack of appropriate investment and ineffective governance.

The recent bursting of the US property bubble had also led to a surge in investors around the world seeking new opportunities in food commodity futures. "Global financial and trade speculations can have a dangerous impact on food prices," Mr Geleta said.

He said food stocks were often bought by traders and stored away in depots and warehouses in anticipation of higher prices and profits. "It’s unacceptable that a trader in London or New York can determine whether or not a father in a country such as India can afford to feed his family," he said.

Ms Joemat-Pettersson told the African agriculture ministers’ meeting in Johannesburg last week that much of Africa was affected by price volatility that had the harshest effect on poor people.

Such households spend up to 70% of their income on food as a result. Price instability was estimated to have pushed 44-million people into extreme poverty and hunger since June last year.