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Economic shock: global food prices jump 10%

posted Aug 31, 2012, 7:33 PM by Prep Experts

August 31, 2012 – FOOD – Global food prices have leapt by 10% in the month of July, raising fears of soaring prices for the planet’s poorest, the World Bank has warned. The bank said that a U.S. heatwave and drought in parts of Eastern Europe were partly to blame for the rising costs. The price of key grains such as corn, wheat and soybean saw the most dramatic increases, described by the World Bank president as “historic.” The bank warned countries importing grains will be particularly vulnerable. From June to July this year, corn and wheat prices each rose by 25% while soybean prices increased by 17%, the World Bank said. Only rice prices decreased – by 4%. In the United States, the most severe, widespread drought in half a century has wreaked havoc on the corn and soybean crops while in Russia, Ukraine and Kazakhstan, wheat crops have been badly damaged. The World Bank said that the use of corn to produce ethanol bio-fuel – which represents 40% of US corn production – was also a key factor in the sharp rise in the U.S. maize price. Overall, the World Bank’s Food Price Index – which tracks the price of internationally traded food commodities – was six percent higher than in July of last year, and one percent over its previous peak, in February 2011. The organization is urging governments to bolster programs to protect their most vulnerable communities from the increase in the cost of food. “We cannot allow these historic price hikes to turn into a lifetime of perils as families take their children out of school and eat less nutritious food to compensate for the high prices,” World Bank President Jim Yong Kim said. He said countries in North and Sub-Saharan Africa and the Middle East were among those most exposed to such price increases because much of their food was imported and food bills make up a large proportion of average household spending.

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