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The food price index has reached its highest level in two years, according to the United Nations—meaning that prices of many staple foods are sharply increasing.
“World wheat and maize prices have risen 57 percent, rice 45 percent and sugar 55 percent over the last six months and soybeans are at their highest price for 16 months” the Guardian reported.
The same article quoted Robert Zoellick, president of the World Bank: “There is growing concern among countries about continuing volatility and uncertainty in food markets.”
Additionally, many worry that this latest escalation will be a repeat of 2008, when high energy costs caused a similar price increase.
Market speculation is considered a major factor in the surging prices. An article in New Scientist magazine stated, “As long as extreme speculation causes constant price bubbles and crashes, either farmers will not get good enough returns to continue investing in production, or consumers will not be able to afford the food.”
Although harvests and global food stocks are higher than in 2008, predicted chaotic weather for the next few years is fueling the buying frenzy in world food markets.
“With prices rising this autumn for many commodities like sugar and cotton, the country’s cabinet announced…it would impose price controls on food, introduce subsidies for the needy and increase the availability of fuel supplies,” The New York Times reported.
Adding to the potential crisis are Russia’s recent drought and wildfires, as well as heavy rains and flooding in countries such as Canada and Pakistan. Also, the United States continues to increasingly use its corn harvests to produce ethanol, leaving much less available for beef production.