Rome. World leaders: food prices go higher - wheat might rise by 60%, vegetable oils by 80%

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Higher food prices may be here to stay as demand from developing countries and production costs rise, says an report by the UN's Food & Agriculture Organization (FAO) and the body for rich nations, the OECD. In its annual Outlook report, the FAO predicted beef and pork prices might be 20% higher by 2017, wheat could be up to 60% more expensive and the cost of vegetable oils might rise by 80%. World prices for wheat, maize and oilseed crops doubled between 2005 and 2007, and while the FAO expects these prices to fall, the decline may be slower than after previous spikes. As well as key factors such as weather, supply and demand and energy costs, speculators are also to blame for making commodity prices more volatile, the FAO says. It is also concerned about the increasing use of crops for biofuels. Looking ahead, climate change may also affect crop harvests, pushing up prices further.

But the hardest-hit by rising food costs will be the poorest people on the planet, where a large share of income is spent on food, the FAO warned. The FAO believes the commodity boom has forced some in the developing world to spend more than half their income on food, particularly those countries that have to import much of their food. But even then, its outlook may be too conservative, says BBC international development correspondent David Loyn, since predicting future oil prices is a near-impossible task. One key assumption made is that crude oil prices will peak at $104 a barrel by 2017 says our correspondent. But as he points out, the price is already well above that, and some reputable analysts are now predicting oil will go to $200 a barrel. And he added that while there may be a drop in food prices in coming years, "there is a sting in the tail. "Prices will level off at a far higher average level than seen before the crisis erupted," he said. "The long era of cheap food is over."

Earlier this month, the FAO calculated the amount of money being spent globally on importing food was set to top $1 trillion (£528bn) in 2008, a 26% rise on the previous year. However, the food crisis could also shift the epicenter of global agriculture from developed to developing countries and the FAO predicts that emerging economies will dominate in the production and consumption of most basic foods in 10 years.

World leaders will meet in Rome next week to seek ways of reducing the suffering for the world's poorest people and ensure the Earth can produce more food to sustain an ever growing population. World Bank President Robert Zoellick underlined the urgency of the problem, announcing $1.2 billion in loans and grant financing for countries struggling with food and fuel costs. 40 heads of state or government are expected at the meeting on Tuesday to Thursday next week. U.N. Secretary-General Ban Ki-moon, who has set up his own task force, will attend, as will the leaders of France, Spain, Japan, Brazil, Argentina and some African nations. Delegates from 151 countries can be expected to make worthy statements on beating poverty, but the talks may reveal divisions on several underlying food and hunger-related issues: free trade, biofuels and genetically modified organisms.

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Photos Courtesy of AFP

Original Source: BBC News and Calgary Herald

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