Thursday, November 18, 2010

New Food Crisis

A food crisis could overtake the world in 2011, according to the Food and Agriculture Organisation. The FAO warns the world to "be prepared" for more price hikes and volatility. Price hikes of 41 per cent in wheat, 47 per cent in maize and a third in sugar are foreseen by the FAO.

For major cereals, production must expand substantially to meet utilisation and to reconstitute world reserves. The main obstacle identified by the FAO standing in the path of such an expansion in food production is the potentially more lucrative use of crops for biofuels and non-grain or non-food cash-crops such as sugar, cotton and soya

"Against this backdrop, consumers may have little choice but to pay higher prices for their food..." the FAO says .

The Fao's chief grains economist Abdolreza Abbassian, said: "There is no doubt speculative activities have brought into the market a great deal of volatility."

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