Global Food Prices Expected to Climb, Get More Volatile

Food prices are stuck near levels not seen since the late 1970s.  And the United Nations expects that trend to worsen well into the future.

Those are the findings of a joint report of the UN Food and Agriculture Organization (FAO), the International Fund for Agricultural Development (IFAD) and the World Food Programme (WFP), “The State of Food Insecurity in the World 2011” issued yesterday.

The report warns of continued food instability due to fossil energy constraints, climate change, local land pressures, and water availability:

There are also compelling arguments suggesting that, in addition to being higher, food commodity prices will also be more volatile in the future. If the frequency of extreme weather events increases, production shocks will be more frequent, which will tend to make prices more volatile. Furthermore, biofuel policies have created new linkages between the price of oil and the price of food commodities. When oil prices increase, demand for biofuels will increase, thus raising food prices, with the opposite happening when oil prices decrease. Because world oil prices have historically been more volatile.

These are all factors Climate Progress has been warning about for years (see links below).

Most of those impacts will be felt by smaller, import-dependent countries in Africa, according to the UN. Many of those countries have been hit particularly hard by a combination of rising prices and severe drought in the region exacerbated by a warming climate. In East Africa alone, more than 12 million people are facing inadequate food supplies, says Oxfam.

The chart below from the UN report illustrates how difficult the recovery has been for African countries compared with other regions:

Aside from extreme weather, one of the biggest problems in developing countries is the amount of food lost due to poor harvesting, transporting and storage practices. In a report released this summer, the UN Food and Agriculture estimated that yearly food losses in the production chain could feed more than 48 million people.

Finally, the threat of even higher price spikes driven in part by ever-worsening extreme weather caused by climate change is especially worrisome for the world’s poor, as they spend such a large fraction of their income on food:

Rich nations have a moral obligation not to let their energy and climate policies drive tens of millions more people into hunger and malnutrition.

NOTE ON TOP FIGURE:  “FAO Food Price Index, adjusted for inflation, 1961–2010, calculated using international prices for cereals, oilseeds, meats, and dairy and sugar products. The official FAO Food Price Index has been calculated since only 1990; in this figure it has been extended back to 1961 using proxy price information.”

Related posts:

• Washington Post, Lester Brown explain how extreme weather, climate change drive record food prices.
• With No End in Sight for Texas Drought, ABC News Explains: “Every Farmer in the World Will Be Affected by Climate Change”
• The Coming Food Crisis: Global food security is stretched to the breaking point, and Russia’s fires and Pakistan’s floods are making a bad situation worse; Podesta, Caldwell: “Lasting gains in agricultural productivity will require … action to confront climate change.”
• How extreme weather could create a global food crisis:  2010 was among the hottest and wettest years on record – we are entering a period of climate and food insecurity