Bad weather hurts global food prices
Digamber Eslampure | Collegio Writer
Global food prices are increasing daily, leaving families around the world struggling to make ends meet. However, bad weather is making the problem worse.
According to the World Bank’s Food Price Watch report released last month, food prices increased by 10 percent in July alone, mostly due to a major drought in the United States, and dry and hot summers in Eastern Europe.
The dry summer in Russia, Ukraine and Kazakhstan is adding further pressure on food prices, while below average rainfall in India is also a cause for concern.
The United States’ Climate Prediction Center expects that the emergence of El Nino in the coming months is likely to happen; if it does, wheat prices will climb to new levels because El Nino would damage the wheat crop in Australia. The silver lining is that El Nino would improve the soybean and corn crops in South America. Nevertheless, the intensity and length of this phenomenon remains unpredictable.
The weather-induced shortfall, from the most important producers, has caused staple crop prices to increase dramatically. Corn and wheat have increased by 25 percent each, sugar prices rose by 12 percent and soybean prices went up 17 percent … and that was just in July. The only good news is the 5 percent drop in rice prices, thanks to an above average season in Thailand.
The countries most vulnerable to the food crisis are in the Middle East, Northern Africa and Sub-Saharan Africa, because these countries depend more on food imports.
There are other reasons behind the abrupt hike in food prices, such as the use of corn in the production of ethanol. About 40 percent of the corn produced in the United States is used for fuel.
Feeding livestock also limits the amount of food available for human consumption. In addition, some economic analysts expect the sharp increase in corn and soybeans may lead to an increase in the alternatives, like wheat. They assume that people won’t be able to buy what they need because of the increased prices, so consumers will look for cheaper substitutes.
What impact will the drought in the U. S. have on world food prices? The United States is the largest exporter of corn and soybeans in the world. The drought means that overseas markets, which rely on the exports from the U.S., will fluctuate because of unsteady production.
However, there are other factors shaping food prices across the world. Regional rainfall, seasonal production, trade policies, taxes and other things will also contribute to the rise in food prices in various countries. For example, wheat prices rose by 52 percent in Sudan, while rice prices increased by 90 percent in Malawi in July.
These kinds of droughts and severe weather conditions could have a huge impact around the world, especially in developing and under-developed countries that depend heavily on food imports.
In times like these, it is important for countries to develop and maintain strong protective mechanisms, good relationships with neighboring countries and other international communities to help reduce the impact such fluctuations in food prices.