World Bank Group President, Jim Yong Kim
By Obinna Chima
Global food prices soared by 10 per cent in July from a month ago, with maize and soybean reaching all-time peaks due to an unprecedented summer of droughts and high temperatures in both the United States and Eastern Europe, the World Bank has said.
According to the multilateral institution’s latest Food Price Watch report obtained on its website at the weekend, between June to July, maize and wheat prices rose by 25 per cent each.
Similarly, the report showed that soybeans price climbed by 17 per cent, saying that only rice went down, by four per cent in the period under review.
Overall, the World Bank’s Food Price Index, which tracks the price of internationally traded food commodities was six per cent higher than in July of last year, and one per cent over the previous peak of February 2011.
World Bank Group President, Jim Yong Kim, said: “Food prices rose again sharply threatening the health and well-being of millions of people. Africa and the Middle East are particularly vulnerable, but so are people in other countries where the prices of grains have gone up abruptly.
“We cannot allow these historic price hikes to turn into a lifetime of perils as families take their children out of school and eat less nutritious food to compensate for the high prices. Countries must strengthen their targeted programs to ease the pressure on the most vulnerable population, and implement the right policies.”
“The World Bank has stepped up its support to agriculture to its highest level in 20 years, and will keep helping countries respond to the food price hikes.”
Continuing, the report revealed that food prices between April and July continued the volatile trend observed during the previous 12 months.
“Sharp domestic price increases have continued in this quarter, especially in Africa. Sub-Saharan Africa, in particular, experienced the highest price increases in maize, including 113 percent in Mozambique. Meanwhile, the Sahel and eastern Africa regions experienced steep price increases of sorghum: 220 per cent in South Sudan, and 180 per cent in Sudan,” it added.
According to the Food Price Watch, weather was the critical factor behind the abrupt global price increases in July. The drought in the United States, it pointed out, resulted in vast damages to the summer crops of maize and soybeans, for which the country is the world’s largest exporter.
“The abrupt food price increases turned favourable price prospects for the year upside down. Droughts have severe economic, poverty and nutritional effects. In Malawi, for instance, it is projected that future severe droughts observed once in 25 years could increase poverty by 17 per cent, hitting especially hard rural poor communities.
“And in India, dismal losses from droughts occurred between 1970 and 2002 to have reduced 60-80 per cent of households’ normal yearly incomes in the affected communities,” it added.
The World Bank’s support for agriculture in its full year 2012, according to the report, was over $9 billion—a level, it said had not been reached in the past two decades.