Food prices stir poverty concern
The price of coarse rice, the staple food of poor Bangladeshis, has more than doubled in a year [EPA]
The International Monetary Fund has said that rising food prices threaten to undermine gains made in cutting poverty and could further strain the global economy.
Food price increases have been caused in part by drought in
"Food prices, for instance, increased by 48 per cent since the end of 2006 until now, which is a huge increase, and it may undermine all the gains we have obtained in reducing poverty," he said.
Strauss-Kahn's comments came on the eve of a meeting of finance ministers and central bank chiefs of the Group of Seven (G7) industrialised countries in Washington DC.
Biofuels link
The increased use of grains to produce biofuels, first heralded as a way to cut greenhouse gases, has been blamed for contribruting to rises in the cost of basic foods.
| In video |
A rising demand for food in emerging market economies has further contributed to grain shortages.
The IMF has calculated that corn ethanol production in the
In the European
Union (EU), most countries exempt biofuels from some gas taxes
and impose an average tariff equal to more than $0.70 per gallon of
imported ethanol.
Riots over rising food prices began in southern
Tens of thousands of people took to the streets to protest against the food price increases.
Four were killed in the disturbances, while UN peacekeepers used
rubber bullets and tear gas to drive away rioters from the presidential
palace.
Reports suggest some people have turned to eating cookies made of dirt, vegetable oil and salt.
Meanwhile, at least seven people have died in
Similar riots have been reported in
Historic levels
"In many developing countries, the poor spend up to 75 per cent of their income on food. When prices of basic foods rise, it hits hard", he said.
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Rising bread prices in Egypt have contributed |
Zoellick said the world needs to recognise that food price inflation is contributing to a growing emergency.
The UN World Food Programme has said it requires $500m just to fill immediate need.
The
World Bank says food price inflation is not a short-term phenomenon but
will likely persist through 2008 and 2009 before demand slackens due to
high prices.
Most people in the world's wealthiest countries take food for granted.
Even the poorest fifth of households in the
In contrast, Nigerian families spend 73 per cent of their budgets on eating, Vietnamese 65 per cent, while Indonesians allocate about 50 per cent.
Last
year, the food import bill of developing countries rose by 25 per cent
as food prices rose to levels not seen in a generation.
Food commodities
World financers have also contibuted to the food price problem.
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"In many developing countries, the poor spend up to 75 percent of their income on food." Robert Zoellick, World Bank President |
Commodities have attracted investors looking for a safe haven from failing investments in the highly-leverage mortgage sector.
Amid this speculation, world wheat prices rose 70 per cent between 2005 and 2007.
In the same period, corn gained 80 per cent in value, while dairy prices nearly doubled.
A senior UN official has said that global investment funds and the weak dollar are largely to blame for the world's rise in food prices.
"The crisis is a speculative attack and it will last", Jose Graziano, the UN food and farm organisation's regional representative for Latin America and the
"The lack of confidence in the [
