Officials Worry Over Rising Prices
U.S. farmers are enjoying a return to record corn and soybean prices, but food officials are concerned about global impact.
Compiled by staff
Published: Dec 29, 2010
Nothing like great news on the farm to get consumer groups worrying about food prices. That's starting to happen as corn, soybean and other commodity prices continue to rise and are nearing those record 2008 levels. Globally these rising prices are a concern with the United Nations Food and Agriculture Organization concerned about rising prices hitting poor countries.
The Food Price Index kept by FAO is up 26% from June to November, and nearing those 2008 peaks. In some developing countries, food spending takes up nearly half of all income. Continued rising food prices could lead to riots in some countries.
However, there's not really a shortage of commodity foods. In fact, while demand for staple grains will rise 2% in 2011 and production will fall 4%, Rabobank notes that reserves run at 17%, which is a safe buffer. The key issue pushing up commodity prices today is the flood of money into the market whether dollars, euros and other currencies is creating a kind of commodity inflation.
Food-related riots may hit some countries, but that remains to be seen. Meanwhile, rising global commodity prices are a concern for world governments.
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Tagged: farm, soybean, United Nations, Food and Agriculture Organization, FAO
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