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BR Research

Food prices - back to the north?

Published December 6, 2012 Updated December 6, 2012 12:00am

Data from the Pakistan Bureau of Statistics shows that food inflation in Pakistan has been dropping down, particularly for fresh produce. But a statement on CNN by Rabia Song, a housewife residing in Islamabad, says, "I don even think about buying fruit; poor people just can afford it."
Songs plight is not just a local phenomenon; many people all over the world are bearing the brunt of high food prices. Reasons for the hefty tag on food items have been oft-discussed: rising energy and fuel costs, substituting land for producing bio-fuels instead of food crops, greater demand for meat and dairy, etc.
But for 2013, poor weather conditions prevalent in most of 2012 will set the stage for steeper prices of food items. In the US, a key grain-exporting nation, the hottest July on record was witnessed; in UK, on the other hand, the wettest summers in a century were seen.
It seems like the brief era of low food prices seen for the past few months is drawing to an end. The impact of climatic changes on food crops is also becoming much more frequent. The CNN quoted a farmer in Kansas, US: "What we are finding though is that the extreme weather events are becoming much more extreme. Historically we haven had these kind of conditions since the 1950s and before that the 1930s."
Rising food prices will also mean riots like the ones seen in 2008 in Egypt should not come as a surprise in 2013.
Whats worrisome is that its not just the supply-side which is responsible for the spikes in food prices. "This is man-made misery in a world which produces enough for everyone to eat," said Oxfam spokesperson Colin Roach.
Theres so much that can be done as far as managing production and supply of food crops is concerned. As climate is obviously a significant contributing factor to the changes in food production, creating awareness about environmental protection, such as greenhouse gas emissions and reducing the carbon footprint, must be given priority, especially in highly industrialised countries.
At the same time, commodity markets should also be regulated in order to ensure that prices of food commodities do not fall prey to speculative trading. Similarly, farmers in poorer countries and even small farmers in high-income countries ought to be trained in adapting to changing climatic patterns.
The worst thing is that you cannot have predictability with the weather conditions, at least not since recently. Better adaptability by farmers and better management of food supply chains across the globe will go a long way.

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