Global food prices continue upward trend, but relatively stable cereal prices could prevent riots, FAO economist says

Nov 4 2010

"Global food prices rose in October" and the U.N. Food and Agriculture Organization's (FAO) Food Price Index increased "for the fifth month in a row," the FAO said on Tuesday, Reuters reports. The index is at its highest level since July 2008.

According to the data, "[t]he index - which measures monthly price changes for a food basket composed of cereals, oilseeds, dairy, meat and sugar - averaged 197.1 points last month, up from an updated 188.7 points in September," the news service writes (11/2).

Though food prices are approaching levels witnessed during 2007 and 2008 when riots broke out as a result, global supplies are stronger and cereal prices, which include wheat and rice, are relatively low, according to FAO economist Abdolreza Abbassian, Reuters/BusinessDay reports (Kovalyova, 11/3). "The situation has deteriorated rapidly," he said, noting that prices were "getting closer to the levels of 2008," the Financial Times reports. "Prospects for improvements are very limited," according to Abbassian.

"Until recently, the FAO had predicted that food prices would fall soon, but now officials are concerned that high costs could continue well into next year or even rise further," the newspaper writes. But the agency "drew comfort from relatively stable prices for wheat and rice, the two more important cereals for global food security, which remain far below their all-time highs," the Financial Times reports. At its all-time high in mid-2008, rice was at $1,000 per ton, but was trading at $505 per ton last week. In February 2008, wheat hit a record of $12.50 per bushel, but traded at $7 on Tuesday (Blas, 11/2).

"Food instability (that) threatened in 2007-08 is so far absent," Abbassian said, according to Reuters/BusinessDay. "We did not have riots because of sugar or soybeans or meat and dairy in 2008; we had riots because of wheat and rice," he noted (11/3).  

FAO Warns Livestock Disease In Tanzania Could Spread And Harm Regional Food Security

Also on Tuesday, the FAO warned that peste des petits ruminants (PPR), a viral disease that broke out in Tanzania earlier in the year, could spread in southern Africa where more than 20 million sheep and goats in 15 countries could be at risk, Reuters reports.

The disease, which is also know as small ruminants' plague, "does not infect humans but is considered as the most killer disease affecting sheep and goats," according to the FAO, Reuters writes (11/2). "If the disease is allowed to spread from Tanzania into the whole of the 15-nation Southern African Development Community (SADC) it could potentially devastate the livelihoods and food security of millions of small herders and agro-pastoralists," FAO said in a press release (11/2).

"FAO issued the warning ... following its recent emergency mission to Tanzania, which recommended that the country initiate an emergency vaccination programme around the outbreak site in the northern half of the nation," the U.N. News Centre writes. "The mission also called on Tanzania to consider additional vaccination measures in the areas bordering Malawi, Mozambique and Zambia, and FAO said these three nations [should] immediately step up vigilance against PPR," according to the news service (11/2).