Higher food prices are here to stay: Report
“Higher food prices and volatility in commodity markets are here to stay,” the OECD and the FAO said in a joint report released on Friday.
The report, OECD-FAO Agriculture Outlook for 2011-2020, noted that food prices are expected to fall from the current high level in the coming months on good harvest but the prices are expected to be higher in this decade than 2001-2010.
“A good harvest in the coming months should push commodity prices down from the extreme levels seen earlier this year. However, the outlook states that over the coming decade real prices for cereals could average as much as 20 per cent higher and those for meats as much as 30 per cent higher, compared to 2001-10,” the report said.
The projections are well below the peak price level experienced in 2007-08 and again this year, it added.
“While higher prices are generally good news for farmers, the impact on the poor in developing countries which spend a high proportion of their income on food can be devastating,” said OECD Secretary-General Angel Gurria in a statement.
The report pointed out that higher prices for commodities are being passed through the food chain, which leads to rising consumer price inflation in most countries.
“This raises concern for economic stability and food security in some developing countries, with poor consumers most at risk of malnutrition,” it added.