Friday, 26 July 2013

Global food prices fall on improved weather – WB

Global food prices fall on improved weather – WB

A customer checks a raw maize ear before buying it from a vendor (left) . Maize production is projected to reach record high this year. Net photo

WASHINGTON – Global food prices fell by 2 per cent in the past four months, marking the third straight period of declines, as reducing imports in the Middle East and North Africa, and lower demand pushed prices down 12 per cent from their August 2012 peak, the World Bank has said.

The World Bank’s Food Price Index showed international prices of wheat fell by 2 per cent, sugar by 6 per cent, soybean oil by 11 per cent and maize by 1 per cent between February and June.

The index, which weighs export prices of food, fats and oils, grains, and other foods in nominal US dollars, fell by 2 per cent.

Improved weather conditions after last year’s droughts helped bolster the production of wheat. The bank said it expects good harvests from the major producers to continue as long as unfavorable weather in northern and central Europe, Russia and China does not drag on production.

Global maize production is expected to reach a record high this year, according to the report, partly driven by a revival in demand from US ethanol producers.

While prices have stabilised recently, the volatility of food prices in recent years has prompted developing countries with high poverty and weak safety nets to respond by ratcheting up consumer food subsidies, the poverty-fighting institution said.

The World Bank and the International Monetary Fund have made a big push in the past year to urge countries to scrap subsidies on consumer food to ease pressures on government budgets and free up more funds for health and education spending.

Both institutions have also questioned whether such subsidies truly improve poverty – as they can often go to large-scale farmers or well-connected people instead of the poorest.

“Poorly designed food subsidy programs that lack transparency and accountability in implementation do not benefit poor people,” said Jaime Saavedra, active vice-president for poverty reduction and economic management at the World Bank. “

These programmes can be very costly and prone to corruption, and waste scarce fiscal resources.”

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Global food prices fall on improved weather – WB


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