Food prices tripled over last 10 years

According to a FAO report, global food prices raised by 29 percent in the last year, the World Bank President, Robert Zoellick, warned.

Escalating prices for basic food products threw into poverty, in the last year, another 44 million people, according to the World Bank Document.

Food costs have exceeded the level of 2008, when most of food and oil prices had a devastating impact on the poor, the World Bank said.

According to the latest statistics of the Food and Agriculture Organisation of the United Nations (FAO), the index for food prices reached a record of 231 points.

For the seventh consecutive month, food price index published monthly by the FAO recorded the highest level since the index has been backtracked in 1990, exceeding a record of 224.1 points recorded in June 2008, when riots took place in some states due to high food prices.

Thus, in January, the food price index reached a record of 231 points, eight points higher than December 2010.

The index for food prices quantifies the changes in prices, every month, for a basket with cereal, oil-based products, dairy, meat and sugar.

The increase in cereal prices to the highest level reached in the last two years and a half was caused by the adverse weather conditions: the drought in Russia (which led to the cancellation of grain exports), the floods in Australia, the adverse weather in Argentina, but also the anticipation of the increase in demand, after the events in North Africa and Middle East.

‘We are entering an era of food shortages and supply issues. This is a huge problem for everyone. If people do not have enough food, they only have three options: riot, immigration or death’, Reuters qoted the Executive Director of the world food program, Josette Sheeran.

Based on the FAO report a tripling of food prices over the last ten years can be observed. In 2000, the index of food price was of 90 units, and in January 2011 this index reached the value of 231 points.

Table of food price index worldwide. Source: FAO

Year	Month	Food Price Index1	Meat2	Dairy3	Cereals4	Oils and Fats5	Sugar6
2000		90	96	95	85	68	116
2001		93	96	107	86	68	123
2002		90	90	82	95	87	98
2003		98	97	95	98	101	101
2004		112	114	123	107	112	102
2005		117	120	135	103	104	140
2006		127	119	128	121	112	210
2007		159	125	212	167	169	143
2008		200	153	220	238	225	182
2009		157	133	142	174	150	257
2010		185	152	200	183	193	302
2010	December	223	166	208	238	263	398
2011	January	231	166	221	245	278	420

Food Price Index1 – measures the price changes month by month, for a basket consisting of cereal, oils and fats, dairy, meat and sugar.

Meat Price Index2 – calculated based on average prices of four types of meat, depending on the global average export trade shares for 2002-2004. This index includes two products of poultry, three bovine meat products, three pig meat products and one ovine meat product.

Dairy Price Index3– consists of butter, skimmed milk powder, integral milk powder, cheese. The average is based on the global average of the export trade shares for 2002-2004.

Cereal Price Index4 – this index is calculated by including cereal and rice prices depending on their global average export trade shares for 2002-2004.

Oil and Fat Index5 – consists of an average of various types of oil (including animal and fish oils) calculated based on average global export trade shares for 2002-2004.

Sugar Price Index6 –index form of the International Sugar Agreement prices with 2002-2004 as base.

Translated by: Manuela Stancu
MA Student, MTTLC, Bucharest University