The price of rice in Pakistan has increased by 23 percent within a brief period of one year, from June 2010 to June 2011, a World Bank report says. The report titled 'Food Price Watch' says that from June 2010 to June 2011, the price of rice in the domestic market of Pakistan has increased by 23 percent while the change in wheat price is recorded to be -1 percent during this specific time frame.
According to the report, the global prices of food in July 2011 remain significantly higher than their levels in July 2010 and close to the 2008 peak levels, with the World Bank Food Price Index increasing by 33 percent last year. Prices for the period April to July 2011 have declined slightly from their peak in February, although prices remain volatile for specific commodities such as rice, maize, and wheat.
Prospects for the overall supply of food have improved since April 2011, but several sources of uncertainty remain. Global stocks still remain alarmingly low. For example, the stocks-to-use ratio for maize currently stands at 13 percent, the lowest since the early 1970s. At these low stock levels, even small shortfalls in yields can have amplified effects on prices.
Domestic food prices continue to fluctuate widely. The annual price changes in maize in the 12 months up to June 2011 ranged from increases of more than 100 percent in Kampala (Uganda) to reductions of 19 percent in Port-au- Prince (Haiti) and Mexico City. Domestic prices of some staples have increased sharply in Central and South America and East Africa. For example, maize prices in the Dominican Republic and Colombia increased by 82 and 25 percent, respectively, between April and June 2011.
Vulnerability to high food prices depends on a number of factors specific to each country and the impact can vary substantially among population groups within the same country. Therefore, an effective response needs to balance emergency interventions for the most vulnerable with longer-term initiatives, and differentiate between those who are at severe risk from those less affected. An integrated agricultural, food security, poverty, and climate agenda needs to be put in place.
Managing long-term risks will also require monitoring prices of food regularly. The report reveals that the adverse impact of higher food prices on net consumers of food can be mitigated by the extent to which consumers can substitute cheaper food items, which in turn depends on the permanency or volatility of the increases. Net food producers may benefit from rising food prices by getting a higher price for what they sell to markets. Other producers may also benefit if they can switch production to commodities whose prices are increasing, which may be more likely to happen if prices are on the rise rather than being volatile.
Wages can also increase following food price rises, particularly when the agricultural sector employs salaried workers, which is more likely in emerging and advanced economies. Finally, if governments use social safety nets to mitigate the impact of rising food prices, beneficiaries of such programmes may see their initial welfare loss from food price increases partially compensated.
The extent to which this happens depends mainly on the pre-existing capacity of safety nets and the quality of programmes. Ultimately, an integrated agricultural, food security, poverty, and climate agenda must consider all the factors that matter for vulnerability to food price increases within a country, from drought resilience to availability of infrastructure and social protection for the most vulnerable. An improved understanding of such factors can be particularly useful to better identify countries and population groups within countries that are subject to a high and continuous risk of food insecurity.
Comments
Comments are closed.