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WFP: Markets and Food Security Factsheet

International food prices have increased steeply in the last six months, bringing the UN Food and Agriculture (FAO) Food Price Index to its highest level since September 2008. However, recent harvests have been better and global food stocks are higher.

In October, the FAO Food Price Index surged to 197 points – up more than 4 percent compared to September and almost 18 percent up compared to July.  This reflects a hike in wheat prices following the drought in the Russian Federation and the country’s subsequent decision to ban wheat exports until mid-2011. Other drivers included higher prices for sugar, oilseed, maize, soybeans and milk. However, the index is still below the peak of June 2008.

FAO’s latest estimates indicate that 30 countries around the world are in need of external assistance as a result of crop failures, conflict or insecurity, natural disasters, and high domestic food prices. The food and nutrition situation remains difficult in parts of the Sahel, in West Africa. [FAO, Crop Prospects and Food Situation, September 2010]

Over the period July to September 2010, in the majority of the 61 countries monitored by WFP, food prices remained stable or decreased compared to the last quarter (except from Asia where low to moderate price increases have been recorded in most countries). However, the cost of the food basket is still significantly high compared to long term averages, especially in Asia and Africa. [WFP, The Market Monitor, Issue 9, September 2010]

The UN Food and Agriculture Organization (FAO) has forecast 2010 global cereal production at 2,239 million tonnes, only one percent lower than last year and still the third largest crop on record.  In developing countries, the outlook for the 2010 cereal crops is generally favourable. However, the cereal import bill for the low-income food-deficit countries (LIFDC), as a group, is predicted to increase, as a result of higher international cereal prices. [FAO, Crop Prospects and Food Situation, September 2010]

The latest edition of the Market Monitor, the WFP bulletin which tracks trends of staple food prices in vulnerable countries, gave the following examples in September 2010:

ASIA:
During the period monitored by WFP, low to moderate price increases are registered for rice and wheat in most countries – this is particularly true in Bangladesh and Lao PDR.

Bangladesh: The cost of a range of items in a typical food basket is still higher than the 5-year average by 54 percent.

Lao PDR:  The cost of the food basket is still higher than the 5-year average by 71 percent.

WEST AFRICA:

In the last quarter, staple food prices have generally decreased in the region due to the good harvest prospects. However, substantial price increases have been recorded in Cape Verde, the Central African Republic (CAR), Guinea and Mauritania.

Central African Republic (CAR): Over the period monitored by WFP, the price of maize increased by 55 percent. The overall cost of the food basket increased by 7 percent compared to the previous quarter and by 4 percent compared to the 5 year average.

Benin: Although prices are trending downwards in the region, they remain significantly higher than their long term seasonal average. In Benin, the overall cost of a typical food basket is still higher than the 5-year average by 32 percent. In particular rice and sorghum are respectively 92 and 158 percent higher than their long-term averages.


SOUTHERN, EASTERN AND CENTRAL AFRICA:

Staple food prices have generally remained stable or decreased from last quarter’s levels in most countries. However, the Democratic Republic of Congo, Mozambique and Somalia experienced significant price increases compared with last year, while Mozambique, Somalia and Zimbabwe registered the highest price increases compared to the 5 year average.

Mozambique: In the last quarter, prices of the main staple foods (import rice and maize) remained stable, except from a slight price decrease of maize. However, prices have remained very high when compared to their long-term averages (prices of maize and import rice are respectively 96 percent and 127 higher than their long-term averages). In terms of the cost of the food basket, this translates into an increase of 31 percent.

On September 2, the Government increased the prices of electricity and water by more than 10 per cent, while diesel prices increased by 24 percent since March 2010, resulting in higher transportation costs. This, combined with rising food prices, contributed to the outbreak of riots in Mozambique in early September.  Nevertheless, in Mozambique's case, higher prices set by the government were due to monetary exchange issues, not concerns about world supplies [AP / International Food Policy Research Institute].


LATIN AMERICA AND CARIBBEAN:

In general, staple food prices remained stable or decreased in the last quarter, except in El Salvador, Bolivia and Costa Rica. In Nicaragua, prices remain very high compared to their long-term averages.

Nicaragua: Prices remain very high compared to their long-term seasonal averages (prices of maize and rice are still higher than their 5-year averages by 36 and 97 percent). The overall cost of the food basket is 29 percent higher than its long-term average.


MIDDLE EAST, CENTRAL ASIA AND EASTERN EUROPE:

Over the last quarter, staple food prices have remained stable or decreased in most countries. However, the severe drought that afflicted the Black Sea region has driven wheat prices upwards, especially in Armenia, Georgia, Tajikistan and Yemen. 

The Market Monitor
FAO food price index graph