Once again, world food stocks are looking precarious. As Mr. Michael Richardson detailed in these pages on Feb. 3, prices are soaring for basic food products and the prospect of hunger, starvation and unrest are rising as well. There are several reasons for this spike in prices, but weather — and climate change — is the most important. It will be difficult if not impossible to insulate food production from weather-related problems in the short term, but steps can be taken to insulate prices from their impact.
According to a U.N. Food and Agriculture Organization (FAO) report issued earlier this month, the seventh consecutive month of food price increases pushed world food prices to record levels last month. The FAO price index, which tracks a basket of 55 food commodities, rose 3.4 percent in January, taking prices to their highest level since tracking began in 1990. Over the past year, the index price of corn has risen 52 percent, wheat 49 percent, and soybeans 28 percent. Ominously, stocks are low and the trend is expected to continue. In total, world food prices rose 25 percent in 2010, forcing countries to spend an estimated $1 trillion on imports — as much as 20 percent more than the year before.
Fortunately for Asia, where rice is a staple food, production and national buffer stocks are rising. According to the FAO, the region's rice harvest in 2010 is expected to reach a record 627 million tons, a 2.1 percent increase over production in 2009. But experts warn that production is not keeping pace with population growth and upward pressure on prices will persist.