From Mirada Global, a look at rising food prices around the world:
World food prices hit a record in January and recent catastrophic weather around the globe could put yet more pressure on the cost of food, an issue that has already helped spark protests across the Middle East.
Up for the seventh month in a row, the closely watched Food and Agriculture’s Food Price Index touched its highest level since records began in 1990. The new figures clearly show that the upward pressure on world food prices is not abating. These high prices are likely to persist in the months to come”, FAO economist and grains expert Absolreza Abbassian said.
Several climate events that affected key crops will probably maintain pressure on the prices of food, while the massive cyclone hit Australia, a major winter storm affects the U.S’s grain belt and the floods keep Malaysia under water.
Last year’s drought in the Black Sea, the strong rains in Australia, dry weather in Argentina and the forecast of increased demand after the protests in Northern Africa and the Middle East have already raised the price of wheat to its highest in two and a half years.
A combination of high oil prices and fuel, increase in consumption of bio-fuel, bad weather and the improvement of future markets made prices rise in 2007-2008, unleashing violent protests in countries like Egypt, Cameroon and Haiti.
Janis Huebner, an economist from German bank DekaBank said that inflation, partly caused by the increase in the price of food, could in turn derive in increase in interest rates in several countries during the year. “This could bring a slowdown in the growth of countries increasing their interest rates”, he said. “And it could affect countries from Asia and other regions, slowing down growth, although I don’t forecast a forced landing”.
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