World food prices may drop as growth stalls

PanARMENIAN.Net - World food prices will drop this year as increases in unemployment in developing and developed countries slows growth in demand, the United Nations said, according to Bloomberg Newsweek.

“We have started to see a decline in food prices,” Jose Graziano da Silva, director general of the UN’s Food and Agriculture Organization, said at a conference in Hanoi March 15.

World economic expansion will slow to 3.3 percent this year from 3.8 percent in 2011, according to the International Monetary Fund. In China, Premier Wen Jiabao has announced a growth target of 7.5 percent for this year, down from 8 percent in the past seven years. Global harvests of wheat and rice, the world’s two most-consumed food grains, are headed for records as farmers boost planting to benefit from rising prices.

“We saw acreage up across almost all crops, while we’ve seen efforts at expanding livestock herds,” adding to food supply and pushing prices lower, Michael Creed, an agribusiness economist at National Australia Bank Ltd., said by phone from Melbourne. The high prices last year certainly produced a response from farmers, he said.

While global food prices climbed for a second consecutive month in February on higher costs for cereals, cooking oils and sugar, they are down 9.5 percent from a record in February 2011. An FAO index of 55 food items increased 1.2 percent to 215.3 points from 212.8 points in January, the agency said March 8.