A new norm of volatility?

Dan Iles takes a look at the latest World Bank food price figures.

The recent World Bank’s quarterly Food Price Watch, released this November, yet again paints a concerning picture in terms of continued high food prices across the world. Worryingly, the World Bank recognises a new norm of high and volatile food prices but still refuses to mention any reference to food speculation and the actions of financial institutions. 

Key points:

• International food prices remain close to all-time highs. Food prices in October are still 7% higher than a year ago, and the prices of grains remain particularly high. Prices of grains are 12% above their levels 12 months ago and very close to the all-time high observed in 2008
• The national price of wheat increased by 27% in Tajikstan between July and September
• Countries reliant of US exports of maize are still very vulnerable to price fluctuations. The price of maize in Haiti and Honduras went up by 28% and 19% respectively between July and September 
• The World Bank has recognised that price stabilisation policies in some developing countries have led to annual declines in the price of wheat. Price regulations introduced in Bolivia have induced a 13% decline between September 2011 and September 2012
• Markets in Southern Malawi have experienced 100% increases in the price of maize between 2011 and 2012
• Maize prices have increased in Tanzania and Haiti by 31% in the last year and in Lesotho by 37% 
• 870 million people worldwide continue to live under chronic undernourishment, unchanged since 2007. This figure is set to cause a failure for the Millennium Development Goal for 2015 to half world hunger.

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