UN: Food prices in developing countries remain very high

Jul 16, 2009, 8:36 GMT

Rome - Domestic food prices in developing countries remain high despite a sharp decline in international prices and overall good cereal harvests, according to a report released Thursday by a United Nations food agency.

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, the Rome-based Food and Agriculture Organization (FAO) warned in its latest Crop Prospects and Food Situation report.

Among the reasons for high food prices, the report listed reduced harvests, higher or delayed imports and civil conflict.

Other factors include regional trade flows, devaluation of national currencies, changes in food and trade policies, increased incomes and demand, and transport constraints and higher transport costs.

In sub-Saharan Africa 80 to 90 per cent of all cereal prices monitored by the FAO in 27 countries remain more than 25 per cent 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 per cent of these remain more than 25 per cent 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.

The outlook for world cereal supply and demand is 'satisfactory,' despite an estimated 3 per cent 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 tons, 3.4 per cent down from last year's record harvest, but nonetheless the second largest crop ever. Reductions are forecast for wheat and coarse grains.

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.

FAO has estimated that the number of hungry people in the world will reach 1.02 billion in 2009

From November 16-18, FAO intends to host a World Food Summit 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.