Some Indications That Food Prices Could Ease Up

“A rush by farmers to expand plantings in many parts of the world is raising expectations that food prices may retreat as early as the second half of this year if weather conditions remain favorable,” the Wall Street Journal reports in a story examining how recent global developments could affect food price spikes.

The “most powerful response” to surging food costs “seems to be coming from farmers themselves, especially in places like Russia, Brazil and Australia,” the newspaper writes. “In Russia, where production fell following a severe drought last year, wheat acreage could rise by more than 15%, according to the [International Grains Council] IGC.” Also, the forecasting firm IHS Global Insight “predicted this month that global food prices would likely ease by the second half of this year as production recovers in some regions following recent weather problems – assuming weather disasters aren’t repeated,” the Wall Street Journal notes before highlighting other factors that suggest food prices could drop.

“A number of analysts still believe it is much too early to call a turn in the market, especially if some of the new plantings don’t come through – which is always a big risk in agriculture, either because of weather or other factors,” according to the Wall Street Journal. The article reports on agricultural output boosts that are expected in Australia, China and India (Mohindru/Barta, 2/23).

Radio Free Europe/Radio Liberty Looks At Factors Pushing Up Food Prices

Radio Free Europe/Radio Liberty examines why global food prices have risen. “In today’s world of interlinked markets, a problem in one place quickly ripples out to others. Croplands in Russia, one of the world’s leading wheat producers, were devastated by fires during last summer’s record-breaking heat wave. Wheat harvests in Ukraine, also plagued by torrid weather, dropped 15 percent last year. Both countries responded by introducing export bans that have exacerbated global shortages of the commodity. Partly as a result, world wheat prices doubled between June 2010 and January 2011,” the news service writes.

“Longer-term trends are also part of the problem. Demand for food is skyrocketing as the middle class grows in countries like China and India. Yet the amount of land devoted to crops has remained unchanged, while efforts to promote agricultural productivity have failed to keep pace,” according to the article, which also explains how increasing demand for biofuels is adding to the problem.

It also notes the role food prices have played in recent demonstrations in Egypt and other countries and looks at how unmet aid needs suggest that longer-term approaches are required to deal with food shortages. “There are some promising signs. So far prices for maize and rice, key staples in Africa and Asia, have remained relatively stable – in part because this time around major exporters like Vietnam and Thailand have abstained from imposing export bans that sent rice prices soaring in 2008,” Radio Free Europe/Radio Liberty reports (Caryl, 2/24).

Food Price-Related Instability Not Expected To Spread To Asia

“Soaring food prices may have helped ignite the popular protests shaking Tunisia, Egypt and now Libya but no similar food shocks should be expected in rice-eating Asia, according to Food and Agriculture Organization (FAO) experts,” Deutsche Presse-Agentur/M&C reports.

The Middle East and Central Asia “comprise wheat-eating cultures, and wheat prices have soared 70 percent on the world market since Russia slapped a ban on its wheat exports in October,” the news service notes. “In recent months, international prices for rice – the food staple for more than three billion people living in South and East Asia – have seen only modest increases.”

“In terms of food security, there is enough rice and that’s what matters in Asia,” FAO policy officer Sumiter Broca said, adding that a lot of Asian countries “are self-sufficient in rice now.” The article examines why rice prices have not risen while the cost of other foods have. Chookiat Ophaswongse, an honorary adviser to the Thai Rice Exporters Association, also is quoted in the article (Janssen, 2/24).