Food prices in many countries remain very high

FAO 16 Jul 09;

High prices affect poor people in rural and urban areas

16 July 2009, Rome - Domestic food prices in developing countries remain high despite a sharp decline in international prices and overall good cereal harvests, FAO warned today in its latest Crop Prospects and Food Situation report.

In several countries, prices exceed the already high levels of a year ago or are still at record levels, creating hardship for millions of people.

In sub-Saharan Africa 80 to 90 percent of all cereal prices monitored by FAO in 27 countries remain more than 25 percent higher than before the soaring food price crisis two years ago. In Asia and Latin America and the Caribbean prices are monitored in a total of 31 countries, and between 40 and 80 percent of these remain more than 25 percent higher than in the pre food-crisis period, according to FAO data.

"The high food price situation continues to give rise to concern for the food security of vulnerable populations in both urban and rural areas, as these groups spend a large share of their incomes on food," FAO said.

In Eastern Africa, in Sudan, prices of sorghum in June were three times higher than two years ago. In Uganda, Kenya and Ethiopia prices of maize have doubled compared to two years ago. In Southern Africa, prices of maize have declined in recent months due to a bumper harvest but remain above the pre-crisis level. In Western Africa, prices decreased in late 2008 following good cereal harvests, but increased again in 2009. In Ghana, prices of maize in Accra have more than doubled since June 2007.

Among the reasons for high food prices, the report listed reduced harvests, higher or delayed imports, civil conflict, strong demand in neighbouring countries and regional trade flows, devaluation of national currencies, changes in food and trade policies, increased incomes and demand, and transport constraints and higher transport costs.

World cereal supply remains satisfactory

The outlook for world cereal supply and demand is satisfactory, despite an estimated 3 percent decline in world cereal production in 2009 from the 2008 record level, FAO said. World cereal production in 2009 is forecast at 2 208 million tonnes, 3.4 percent down from last year's record harvest, but nonetheless the second largest crop ever. Reductions are forecast for wheat and coarse grains.

In Low-Income Food-Deficit countries, prospects for 2009 cereal crops are generally favourable and aggregate production is forecast to increase for the second consecutive year. However, the outlook is uncertain in parts of Western and Eastern Africa as well as in Asia reflecting an erratic start of the rainy season.

30 countries in crisis

Despite a positive outlook for global cereal supplies, 30 countries around the world are in crisis and require assistance as a result of natural disasters, conflict or insecurity, and economic problems.

A World Food Summit is to be held at FAO Headquarters in Rome from 16-18 November with the aim of securing a broad consensus on the eradication of hunger, on improved governance of the international agricultural system and on policies and programmes to ensure world food security.