The world is eating more than it produces and food prices may climb for years because of expansion of farming for fuel and climate change, risking social unrest, an expert and a new report said on Tuesday.
Biofuel expansions alone could push maize prices up over two-thirds by 2020 and increase oilseed costs by nearly half, with subsidies for the industry effectively constituting a tax on the poor, the International Food Policy Research Institute said.
Global cereal stocks, a key buffer used to fight famines around the world, have sunk to their lowest level since the 1980s due to reduced plantings and poor weather, said the institute's director general, Joachim von Braun.
"The world eats more than it produces currently, and over the last five or six years that is reflected in the decline in stocks and storage levels. That cannot go on, and exhaustion of stocks will be reached soon," he told a conference in Beijing. Countries such as Mexico have already experienced food riots over soaring prices, von Braun added in a report released at the same meeting, held by the Consultative Group on International Agricultural Research.
"The days of falling food prices may be over," said von Braun, lead author of the "World Food Situation" report. "Surging demand for food, feed and fuel have recently led to drastic price increases ... climate change will also have a negative impact on food production," he added.
Growing financial investor interest in commodity markets as prices climb is fuelling price volatility, and world cereal and energy prices are increasingly closely linked.
With oil prices hovering around $90 a barrel, this is bad news for the poor, who have already suffered "quite dramatic" impacts from a tripling in wheat prices and near-doubling in rice prices since 2000, the report said.