FRANCE/EGYPT: Food prices to stay high, bio-fuels being one of the responsible factors

Record ID: 725879

  • Title: FRANCE/EGYPT: Food prices to stay high, bio-fuels being one of the responsible factors
  • Date: 30th May 2008
  • Summary: (EU) PARIS, FRANCE (FILE - 2008) (REUTERS) FRENCH FOOD MARKET PEOPLE BUYING FRUIT SELLER ON HIS FRUIT STAND SHOPPER TAKING OUT COINS TO PAY SIGN SHOWING PRICE VARIOUS OF FRUIT AND SHOPPER
  • Embargoed: 14th June 2008 13:00
  • Keywords:
  • Topics: Economic News
  • Reuters ID: LVA2PTD7I7760VWBE2V9FGVJ88Q
  • Story Text: Food prices will remain high over the next decade even if they fall from current records, the director of food and agriculture at the Organisation for Economic Co-operation and Development (OECD) said on Thursday (May 29).
    The result means millions more will risk further hardship or hunger, according a report published by two international bodies - the OECD and the United Nations Food and Agriculture Organisation (FAO).
    The report, issued ahead of a world food summit in Rome next week, calls for an immediate need for humanitarian aid.
    On top of that, it suggests wider deployment of genetically modified crops and a rethink of biofuel programmes that guzzle grain which could otherwise feed people and livestock.

    "Food prices are currently at an extremely high level," said said Stefan Tangermann, the OECD Director for Trade and Agriculture, adding that there are at least three permanent factors contributing to the situation.

    "It's the high oil prices, producing food is pretty energy intensive and therefore oil prices drive the cost of food and therefore prices, secondly it's the demand of the emerging economies but fortunately enough, enough people now become richer and richer and therefore can afford to buy more food but then, thirdly, there is a growing demand for bio-fuels, largely policy driven and that also adds to the further price pressure on the international agricultural markets," he said.
    The report estimates beef and pork prices will likely hover around 20 percent higher than in the last 10 years, while wheat, corn and skimmed milk powder would likely command 40-60 percent more in the 10 years ahead.
    The price of rice, an Asian staple expected to become more important also in Africa in the years ahead, would likely average 30 percent more.

    "It will certainly mean that more people are malnourished, it will mean in particular that children will not get enough food. That means that potentially a whole generation of children from poor families will not have a bright future," Tangermann said.
    The cost of many food commodities has doubled over the last couple of years, sparking widespread protests and even riots in some of the worst affected spots, including Egypt.
    Droughts in big commodity-producing regions like Australia explained some of the acceleration in prices, as did growing demand, the report said.
    But it also singled out the drive to produce biofuels as an alternative to fossil fuels, a push the U.S. government and Europe sponsors.
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