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A Commodities Bubble? |
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Poorest countries’ cereal bill continues to soar, governments try to limit impact
Forecast growth in 2008 cereal production could ease tight global supply
11 April 2008, Rome – The cereal import bill of the world’s poorest countries is forecast to rise by 56 percent in 2007/2008. This comes after a significant increase of 37 percent in 2006/2007, FAO said today.
For low-income food-deficit countries in Africa, the cereal bill is projected to increase by 74 percent, according to the UN agency’s latest Crop Prospects and Food Situation report. The increase is due to the sharp rise in international cereal prices, freight rates and oil prices.
International cereal prices have continued to rise sharply over the past two months, reflecting steady demand and depleted world reserves, the report said. Prices of rice increased the most following the imposition of new export restrictions by major exporting countries. By the end of March prices of wheat and rice were about double their levels of a year earlier, while those of maize were more than one-third higher, according to the report.
FAO has launched an Initiative on Soaring Food Prices (ISFP), offering technical and policy assistance to poor countries affected by high food prices in order to assist vulnerable farmers to increase local food production. Field activities are starting in Burkina Faso, Mauritania, Mozambique and Senegal. FAO will also help governments prepare actions and strategies to increase agricultural production. In collaboration with the World Food Programme, IFAD and other partners, FAO will enlarge its food market information system to pull together and analyze various data sources at local, national and international levels and to disseminate this information. FAO has allocated US$17 million for these activities.
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