A report from the U.N. Food and Agriculture Organization (FAO) and the Organization for Economic Co-Operation and Development (OECD) projects even higher food prices in the coming decade.
Food prices in the past year have risen more than 20 percent in China, Kenya and Sri Lanka; more than 18 percent in Botswana and Pakistan; and 11 to 14 percent in Indonesia, South Africa, Egypt, Haiti and Bangladesh, according to the report.
No country has been immune. In the past year, the report says, the price of butter was up 50 percent in Poland, 40 percent in France and 36 percent in Jordan. Eggs rose 34 percent in the United States and 30 percent in Britain. The price of vegetable oil -- a key commodity in diets in developing countries -- rose 47 percent in Botswana and 18 percent in India. Meat prices jumped 45 percent in China.
The report predicts prices will continue their climb, on an average basis, in the coming decade. When the average for 2008 to 2017 is compared with the 1998 to 2007 period, beef and pork prices could be about 20 percent higher, raw and white sugar about 30 percent; wheat, corn and skim milk powder 40 to 60 percent; butter and oilseeds more than 60 percent; and vegetable oils more than 80 percent, the report says.
I think the authors of this report underestimate the extent of the coming food price rise because they incorrectly project lower oil prices.
The report estimates the cost of oil at $90 a barrel this year and next, gradually rising to $104 a barrel in 2017.
Peak Oil is starting to bite. Oil exports from big oil producers are declining. Natural gas is following oil up and that will continue to drive up the cost of ammonia for fertilizer and the costs of other inputs to farming that require energy.
|Share |||By Randall Parker at 2008 June 01 06:36 PM Economics Food|