Food prices decline but close to historical peak: World Bank

Business

oi-Sunil

By Sunil Fernandes

Published: Thursday, March 28, 2013, 9:06 [IST]

Global food prices continued to decline for six consecutive months, but still remain very high and close to their historical peaks, the World Bank has said in quarterly Food Price Watch report said.
"The persistently high and volatile food prices not only influence conditions of hunger and undernutrition, but also obesity which may increase in the context of high prices as people opt for cheaper, less nutritious food to feed their families, the World Bank Group's quarterly Food Price Watch," report said.

"Unhealthy food tends to be cheaper than healthy ones, like junk food in developed countries. When poor people with some disposable income in developing countries try to cope with high and increasingly volatile food prices, they also tend to choose cheap food that is high in calories but without much nutritious value," said Otaviano Canuto, World Bank Group's Vice President for Poverty Reduction and Economic Management. "Half of the world's overweight people live in just nine countries -- China, United States, Germany, India, Russia, Brazil, Mexico, Indonesia, and Turkey -- evidence that obesity is not an epidemic restricted only to rich countries."

According to the latest edition of the Food Price Watch, global food prices continued to fall between October 2012 and February 2013 - a trend observed since the recent all-time peak in August 2012 - but prices were only 9 percent below the August peak. Lower demand from a sharp fall in the use of wheat feed and reduced maize consumption for ethanol in the United States pushed prices down. Reported favorable weather conditions in some regions have also raised hopes of better crop supply for 2013.

Global stocks of cereals dropped by 3 percent in 2012, mainly due to the decline in wheat stocks and coarse grains. The continued dry conditions in Argentina, South Africa and Australia also cast doubts over supplies in the coming months. Oil prices have been on the rise for three consecutive months, marking its highest level in February since April 2012. Stronger demand from Mexico, Indonesia, South Korea, Turkey, and possibly China may pressure the market.

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