World Food Prices have increased by nearly 10% in July the World Bank said Thursday.
World Bank President Jim Yong Kim said in a statement. “Africa and the Middle East are particularly vulnerable, but so are people in other countries where the prices of grains have gone up abruptly.”
He added, “Food prices rose again sharply threatening the health and well-being of millions of people.”
The souring prices have largely been due to drought in the US and Eastern Europe crop centers, raising a food security threat to the world’s poorest people.
Central US produces the world’s largest crops of corn (maize) and soybeans. the devastating heat wave swept through this region causing an extended drought affecting crop production in the region.
From June to July, the prices of both corn and wheat jumped by 25% while soybeans were up 17%. Corn and soybean prices topped their previous record highs in the food price crisis of June 2008.
Other key global staple, rice, was 4% lower. This has left the World Bank’s food price index 6% higher than a year earlier and 1% higher than the February 2011 peak.
The surge in crop prices places in danger millions around the world, especially in countries dependent on imported grains, according to the World Bank.
World Bank called countries in the Middle East and North and Sub-Saharan Africa the “most vulnerable to this global shock.”
“They have large food import bills, their food consumption is a large share of average household spending, and they have limited fiscal space and comparatively weaker protective mechanisms,” the Bank said in its Food Price Watch report.
“Domestic food prices in these regions have also experienced sharp increases even before the global shock due to seasonal trends, poor past harvests, and conflict,” it said.
The World Bank said that the diversion of corn to produce ethanol biofuel — which takes up to 40 percent of US corn production — is a key factor in the sharp rise in the corn price.
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