Food prices are expected to hit new highs in the coming weeks, potentially triggering further unrest in developing countries unless there is heavy rainfall across drought-affected Europe, the United Nations has warned. According to the Daily Telegraph, the average global price of cereals jumped by 71 per cent to a new record in the year to April, more than three times higher than a decade ago, according to latest UN figures, prompting its Food and Agriculture Organisation to warn that Europe faces a pivotal few weeks.
Duncan Green, Oxfam’s head of research, said while rising cereal prices would make life much harder for many people in Europe, the impact in the developing world would be devastating, reported the Daily Telegraph.He pointed out it was not uncommon for people in the developing world to spend more than half their money on staple items. As a proportion of salary, the average Indian paid the equivalent of £10 for a litre of milk and £6 for a kilo of rice, he added.
“We are very worried about high prices,” Green said. “Food riots are definitely a possibility. If you’re struggling to feed your kids and the price of bread suddenly doubles, it could prove the tinder that sparks the whole thing off.” With the dry spell forecast to continue for several weeks across Europe, Abdolreza Abbassian, senior grains economist at the FAO, said, “Europe is entering a very critical month. We can’t do without rain any more. If the current situation continues prices will respond very aggressively.”
“Our fear is that we still haven’t seen the worst of food inflation in vulnerable countries and that could be coming. One way or another, rising food prices bring hardship on their people and you can’t rule out the possibility of further food riots. A lot depends on the next few weeks and it’s impossible to predict how Mother Nature will behave,” Abbassian added.
The UN warning came after the release of data showing that the amount of speculative money that has been pouring into basic foodstuffs – and other commodities – also hit a new record in April, putting additional upward pressure on prices that are already being forced higher by the prospect of further crop failures, says the Daily Telegraph.