WASHINGTON, August 15, 2011−Global food prices are at high levels and when
combined with
continued volatility, put the poorest people in the developing world at
continued risk, according to the World
Bank Group’s Food Price Watch released today.
While the emergency in the Horn of Africa was triggered by prolonged
droughts, especially in areas
struggling with conflict and internal displacement such as Somalia, food
prices that are near the record
high levels seen in 2008 also contributed to the situation, the report said.
Over the last three months,
reportedly 29,000 children under five have died in Somalia and 600,000
children in the region remain at
risk in the ongoing crisis that is threatening the lives and livelihoods of
more than 12 million people.
“Nowhere are high food prices, poverty and instability combining to produce
tragic suffering more than in
the Horn of Africa,†said World Bank President Robert B. Zoellick. “The
World Bank is stepping up with
short term help through safety nets to the poor and the vulnerable in places
like Kenya and Ethiopia, along
with medium term support for economic recovery. Long term support is also
critical to build drought
resilience and implement climate-smart farming.”
The Food Price Watch says global food prices in July 2011 remain
significantly higher than a year ago.
Prices overall remained 33 percent higher than a year ago with commodities
such as maize (up 84
percent), sugar (up 62 percent), wheat (up 55 percent) and soybean oil (up
47 percent) contributing to the
increase. Crude oil prices are 45 percent higher from July 2010 levels,
affecting production costs and the
price of fertilizers, which increased by 67 percent over the same period.
Prices from April through July
settled roughly five percent below the recent spike in February 2011 due to
modest declines in grains, fats
and oil, and other foods such as meat, fruits, and sugar. However, prices of
some commodities remained
volatile during this period. For example, maize and wheat prices declined in
June and then increased in the
first half of July. The price of rice fell from February to May, but has
since increased.
“Persistently high food prices and low food stocks indicate that we’re still
in the danger zone, with the most
vulnerable people the least able to cope,†Zoellick said. “Vigilance is
vital given the uncertainties and
volatility that exists today. There is no cushion.â€
The quarterly report warns that vigilance is needed as global food stocks
remain low and expected volatility
in the prices of sugar, rice, and petroleum products could have unexpected
effects on food prices in the
months ahead. Uncertainties about the global economy combined with the
political situation in the Middle
East and North Africa region will likely to keep oil prices volatile in the
short term, it added.
Domestic food prices continued to be volatile across countries. Maize
prices, for instance, were up more
than 100 percent in Kampala, Mogadishu and Kigali markets in the 12 months
to June; while prices for
maize fell 19 percent in Port-au-Prince and Mexico City. In the midst of
these large price variations,
domestic prices of key staples increased sharply in a number of regions in
the past quarter, notably in EMBARGOED: NOT FOR PUBLICATION, BROADCAST, OR
TRANSMISSION UNTIL MONDAY, AUGUST 15, 2011 AT 19:01 PM
EDT (WASHINGTON DC), WHICH IS 23:01 GMT.
Central and South America and East Africa. The report also says sustained
increases in food prices are
driving up inflation in a number of countries such as Ethiopia and Guatemala
among others.
In Somalia, prices of locally produced cereals have continued to increase in
all regions since October 2010
and have now exceeded their 2008 peak levels. Prices of the two major
commodities that are domestically
produced, red sorghum and white maize, have increased up to 240 percent and
154 percent respectively.
Prices of imported commodities, such as rice, sugar, wheat flour, vegetable
oil, and petrol, are also higher
than a year ago.
Out of 3.7 million people in crisis in Somalia, 3.2 million are in urgent
need and 2.8 million of these people
are in the south. Poor farmers with no stock and no means to purchase food
are among the worst affected,
as are the displaced given their difficulties accessing food. The urban poor
are suffering from increases in
the cost of living and falling wages.
The World Bank Group is providing $686 million to save lives, improve social
protection, and foster
economic recovery and drought resilience for people in the Horn of Africa.
Initially, the Bank will target the
most vulnerable by enhancing safety nets. Economic recovery will be the
focus over the next two years. In
the longer term, the Bank will focus on building resilience to droughts,
including investments in drought risk
reduction and risk financing, as well as climate-smart agricultural
practices.
“We are stepping up to address this crisis with a sense of urgency,†said
Zoellick, who has been
advocating for the G20 to put food first since the beginning of this year.
The G20 Agriculture Ministers meeting in June agreed to exempt humanitarian
food aid from export bans
and to pilot small regional emergency food reserves that could be used to
replenish national safety nets.
The ministers also agreed on more transparency, more coordination, stronger
risk management
instruments and more investment in production. The G20 Heads of State are
due to meet on these issues
in November.
How the World Bank Group is helping to put food first
ï‚· The World Bank Group is providing $686 million to save lives, improve
social protection, and foster
economic recovery and drought resilience for people in the Horn of Africa.
More than 12 million people
are affected by the crisis.
ï‚· A first-of-its-kind World Bank Group risk management product, provided by
International Finance
Corporation (IFC), will enable up to $4 billion in protection from volatile
food prices for farmers, food
producers, and consumers in developing countries.
ï‚· The Global Food Crisis Response Program (GFRP) is helping some 40 million
people through $1.5
billion in support.
ï‚· The World Bank Group is boosting its spending on agriculture to some $6 to
$8 billion a year from $4.1
billion in 2008.
ï‚· Supporting the Global Agriculture and Food Security Program (GAFSP), set
up by the World Bank
Group in April 2010 (at G20’s request) to assist country-led agriculture and
food security plans and
help promote investments in smallholder farmers. To date, six countries and
Gates Foundation have
pledged about $925 million over the next three years, with $520 million
received.
ï‚· The World Bank Group is coordinating with UN agencies through the
High-Level Task Force on the
Global Food Security Crisis and with NGOs