AVERAGE global food prices leapt by ten per cent in the month of July, raising fears of soaring prices for the planet’s poorest, the World Bank has warned.
Its report said that a US heatwave and drought in parts of Eastern Europe were partly to blame for the rising costs.
The price of key grains such as corn, wheat and soybean saw the most dramatic increases.
From June to July this year, corn and wheat prices each rose by 25 per cent while soybean prices increased by 17 per cent.
In the United States, the most severe, widespread drought in half a century has wreaked havoc on the corn and soybean crops while in Russia, Ukraine and Kazakhstan, wheat crops have been badly damaged.
The World Bank said that the use of corn to produce ethanol biofuel, which represents 40 per cent of US corn production, was also a key factor in the sharp rise in the US maize price.
Overall, the World Bank’s Food Price Index, which tracks the price of internationally traded food commodities, was six per cent higher than in July of last year, and one per cent over its previous peak, in February 2011.
World Bank President Jim Yong Kim warned that countries in North and Sub-Saharan Africa and the Middle East were among those most exposed to the huge price increases because much of their food was imported and food bills make up a large proportion of average household spending.
Already, maize prices had increased by a massive 113 per cent over the past quarter in Mozambique, while sorghum had risen by an astronomical 220 per cent in South Sudan.
The bank warned of potential risks which could push grain prices higher, including exporters pursuing panic policies, disappointing Southern hemisphere crops and strong increases in energy prices.
The G20 group of leading economies has said it will not take any decision on joint action until after the US agriculture department’s September estimate of this year’s harvest.
Oxfam’s Colin Roche said: ‘This “wait and see” attitude is unacceptable. Oxfam is already seeing the devastating impact of food price volatility in developing countries that rely on food imports.’
Huge food price increases in 2008 set off the revolutions in Tunisia, Algeria and Egypt.
