Food prices

October 2012
Overview

Between the 1950s and the early 2000s, prices of cereals on world markets fell in real terms remarkably: in 2001 the price of maize was just 25% of the 1957 level, while those for rice were 20% and for wheat 31% of that level. Yet subsequently these prices have tended to rise, with a notable spike in 2007/08 producing the sharpest increase in food prices seen in the 34 years since the early 1970s. Prices fell back, but again have surged to remain well above those seen at the turn of the century.

Forecasts for the next ten years see cereals prices as remaining high in real terms. Moreover, there are fears that volatility of prices may be increasing so that the chances of another price spike are uncomfortably high.

Price spikes are damaging to the poor, at least in the short term. Even if most of them live in rural areas and have livelihoods in and around farming, many are net buyers of food so that increases in food prices lead to hardship and potentially to malnutrition. At national level, low income countries are faced by heavy increases in the cost of imported food, draining foreign exchange, importing inflation, and putting a brake on their growth and development.

In the medium term, however, farmers will have more incentive to produce more and may see their incomes rise. More agricultural output at higher prices could well benefit smallholder farmers, those who work for them, and those who work in food processing and marketing.

As the world adjusts to higher food prices, ODI studies:

  • Changes in international cereals markets, tracking prices and their determinants to anticipate significant price movements in the near future;
  • The causes of higher food prices, including links to oil prices and associated demand for biofuels;
  • The impacts of higher prices on poor and vulnerable people;
  • Potential policies to mitigate harm, as well as policies to help farmers grow more food, and push prices back down; and,
  • Links from agriculture to poverty to hunger and malnutrition.

 

Agricultural Development and Policy
Outputs

Navigating the maize story

26 July 2012 - Steve Wiggins and Sharada Keats
'Given the probable health benefits of a modest intake of meat, how long before policy-makers in Beijing take firm measures to encourage diets similar to those seen across the Yellow Sea?'

Food prices special: US maize harvest in trouble

Publication - July 2012
ODI’s Food prices updates focus on tracking international prices of key staple cereals maize, rice, and wheat, and provide commentary on events in markets that affect these prices. They also follow international food and commodity price indices. This special update reports on the effects of recent extreme weather on the US maize crop.

Food Price Update March 2012 Annual Review

Publication - April 2012
March 2012 - Annual Update: ODI’s Food prices updates focus on tracking international prices of key staple cereals maize, rice, and wheat, and provide commentary on events in markets that affect these prices. They also follow international food and commodity price indices. The Annual update includes a look at how cereals markets have evolved since the 2007/08 price spike.

Food Prices – is the only way up?

18 October 2011 - Steve Wiggins, Andrew Norton and Anna Locke
This blog provides an overview of a roundtable event that brought together key people involved in the food prices agenda to understand the differences in projections of food prices that have emerged over recent months and possible policy responses to this.

Food price dynamics: Where to now?

Event - 7 October 2011 01:30 - 17:30 (GMT+01 (BST))

Where are prices of cereals headed over the next ten years? And what does this imply for policy?


These questions were addressed at a workshop with presentations from Merritt Cluff of FAO, Dirk Willenbockel from IDS and Chris Gilbert from Trento University. All agreed that prices are likely to fall a little in real terms, but will remain well above the levels seen in the early 2000s.

A panel of specialists chaired by Simon Maxwell, with Brendan Bayley from HMT, Bettina Prato from IFAD, Benoit Daviron from CIRAD, and Ruth Kelly from Oxfam, shared their views on the policy implications of a world facing sustained higher food prices and possible increased volatility.

A report of the event, a blog outlining key messages from discussion, as well as presentations and videos from key speakers can be found on this page.

Cereals prices in 2020: how worried should we be?

12 September 2011 - Steve Wiggins and Sharada Keats
Recent forecasts reveal vastly different perspectives on future cereals prices: on the one hand seeing substantial increases by 2020, and on the other, seeing a gradual decline from current levels. Why do these forecasts differ? Which is more likely to be correct? And what do they imply for policy?

Is fretting about US and EU biofuel policy missing the point?

9 November 2010 - Steve Wiggins and Henri Leturque

With food prices rising again, concern rightly mounts over land being used to grow biofuels. While there is good reason to criticise US and EU policies to replace transport fuels from oil by biofuels, the real issue is protecting tropical forests and other land from mass conversion to oil palm groves and sugar cane fields.

Food price updates

Publication
ODI’s Food Price Updates focus on tracking international prices of key staple cereals maize, rice, and wheat, and provide commentary on events in markets that affect these prices. They also follow international food and commodity price indices. Each edition tends to include a short in-depth section on a topic of interest.