World Bank: Global Food Prices Ease as Demand Falls, Supplies Rise

Wednesday, 27 Mar 2013 08:13 PM

 

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Global food prices have declined in recent months as lower demand for cereals and improved supplies pushed prices down, the World Bank said on Wednesday, warning that prices were still near record peaks and volatile.

The World Bank's Food Price Index showed international prices of wheat fell by 11 percent, sugar by 10 percent and maize, or corn, by 6 percent during the four-month period between October 2012 and February 2013.

The poverty-fighting institution said lower demand from a sharp fall in the use of wheat feed and declines in corn consumption for ethanol in the United States has pushed prices down. Favorable weather conditions in some regions have also raised hopes of better crop supply for 2013.

However, global food prices remain only 9 percent below the all-time high recorded in August 2012, the World Bank said.

"This means that despite sustained declines, international food prices remain very high and still close to their historical peaks," the World Bank said.

It also expressed concern that drought in the United States and poor rains in Argentina, South Africa and Australia cast doubts over supplies in coming months. Global oil prices have also risen for three consecutive months, which could also weigh on food prices because of increased transport costs.

Brent crude oil closed at $109.69 per barrel on Wednesday.

A drawdown in Thailand's accumulated rice stockpiles, estimated at 12 million tonnes - equivalent to one-third of the world's total traded rice - might be destabilizing to food markets, the World Bank added.

© 2014 Thomson/Reuters. All rights reserved.

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