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Posted at 12:17 PM ET, 02/15/2011

World Bank report: Jump in global food prices pushes millions into poverty

By Howard Schneider

Rising food prices pushed millions of people into extreme poverty last year and is reaching "dangerous levels" in some countries, World Bank President Robert Zoellick said Tuesday as he released new data showing the cost of grain and other staples is near its historic high.

A bank index of food costs rose 15 percent over the last four months and is now just 3 percent below the level reached in 2008, a historic high that eased during the economic downturn.

Wheat prices have been among the fastest moving, doubling between June and January as Russia restricted exports, Australia's crop was damaged by flooding and the size of China's upcoming winter crop has been cast into doubt due to an ongoing drought.

The likelihood that political turbulence in the Middle East might prompt countries like Egypt to increase their grain reserves is also pushing up the price of wheat and other grain futures on world commodity markets, the bank reported.

There are some bright spots: the rice harvest has been strong, and prices for that staple have increased more slowly than for other grains. In Africa, people have begun substituting local products like sorghum and cassava for imported food.

But the bank estimated rising food costs pushed an additional 44 million people below the threshold of extreme poverty, meaning they are surviving on the equivalent of $1.25 a day. It also threatens to undermine public budgets in places like Albania and Tajikistan that rely heavily on imported food and have little ability to pay more.

By Howard Schneider  | February 15, 2011; 12:17 PM ET
Categories:  Food prices, International Economics  
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Comments

Yet we continue throwing away corn on inefficient ethanol.

Posted by: Cryos | February 15, 2011 1:36 PM | Report abuse

We’re getting prepared for anything that may happen. Was at the store the other day and bought Kroger brand green beans for $1.06 a can. I remember not too long ago when they were .69 cents a can. Went online and found meals for .91 cents a serving, dehydrated from premium-grade fresh raw American foods. 15 year shelf life. Food that is not genetically altered, no illegal fertilizers or insecticides..., no hydrogenated oils, msgs or gmos and zero trans fats. Certified kosher and vegetarian as well. I got 6 free meals, just paid s&h. www.steve45.myefoods.com Food is delicious!

Posted by: smynhier | February 15, 2011 1:46 PM | Report abuse

Stock up on ammo.

Posted by: FLvet | February 15, 2011 2:22 PM | Report abuse

Cluebat to OPEC: Open the spigots and lower artificially inflated oil prices.

Posted by: KaddafiDelendaEst | February 15, 2011 2:47 PM | Report abuse

We need to quit growing corn for ethanol and we need to protect our farmland from development. The government needs to ban gmo crops with their low yields. The government can buy surplus crops again after the gmo's are banned.

Posted by: angel6 | February 15, 2011 2:52 PM | Report abuse

corn for ethanol is still better than corn for corn syrup.

Posted by: Anonymous | February 15, 2011 3:29 PM | Report abuse

Totally agree with Cryos about the ethanol program. Would it help if Americans substantially reduced the amount of bread in their diets? We could all lose a few pounds anyway. I would gladly give up bread if it meant more wheat available for poor countries.

Posted by: Anonymous | February 15, 2011 3:50 PM | Report abuse

First we need to quit using corn in ethanol and second we need to quit subsidizing those farmers and the companies who make ethanol from corn. There are cheaper alternatives and that corn can be used to feed people.

Posted by: Desertdiva1 | February 15, 2011 3:57 PM | Report abuse

Ethanol who eats that. How is we should stop selling corn to the highest bidder. Which one of we has a farm and grows anything. What we need is more of these know it alls' to buy some farms and see how they feel about turning their grain over to the poor for reduced cost. Now these socialist communist want to end the free market for commodities. The market takes care of everyone Archer Daniels Midland needs to meet their margins. So what if a few poor people die there are more born every day.

Posted by: fish4 | February 15, 2011 4:13 PM | Report abuse

Stop the ethanol insanity first; who cares what ADM, ConAgra, and the EPA think about that. We should have been using grain prices for leverage years ago. The answer to the oil cartel and inflated oil prices could have been answered by high export tariffs on grain to oil cartel countries; it would have been a wonderful bargaining tool and perhaps a nice source of income.

Posted by: Anonymous | February 15, 2011 4:28 PM | Report abuse

Congratulations Ben Bernanke and Barrack Obama. You both wanted inflation and now you are getting it. The unemployed in the states can now buy even less with their unemployment check. At least wall street and the banks are doing well and aren't they the ones who really count. Good job guys, way to go.

Posted by: Anonymous | February 15, 2011 7:28 PM | Report abuse

Fish 4 you can't spell or write a coherent sentence. Learn how to spell and read something before you make any more comments.

Posted by: Anonymous | February 15, 2011 7:54 PM | Report abuse

What's all this bellyaching about corn. I thought wheat was the problem this year because of the fires in Russia and bad weather conditions elsewhere.

It's true that inflation is pushing up food prices. And trying to reduce the deficit by cutting out agriculture subsidies will make things a lot worse next year.

But because big box food stores compute their mark-up as a percentage of wholesale prices, they should see profits kick up.

I doubt things would be any different with a republican president.

Counting calories and cutting down on carbs could save some money as well as cut out some extra poundage so this could be a blessing in disguise for overweight Americans - while slowing down the rise in global population by starving out the poor.

Heaven does things in even more mysterious ways than governments.

Posted by: Anonymous | February 16, 2011 1:56 AM | Report abuse

Well, we can't do much about the weather and some of the cost increases have been the result of bad weather and failed harvests. On the other hand, let's not forget the trillions of new dollars created by the world's central bankers. That new money doesn't go unnoticed by the guys who speculate in commodities.

What does a rib-eye steak cost these days? $13.99 a pound? I wonder when the price will break $20?

Posted by: John991 | February 16, 2011 3:50 AM | Report abuse

Stock up on ammo.

---

Yes, and the rest of us can feed your paranoia.

lol.

Posted by: Anonymous | February 16, 2011 5:58 AM | Report abuse

Ethanol made from corn uses less than 3% of global grain supplies, and ethanol production has led to double digit improvements in corn harvesting. Don't blame ethanol for higher Wheat and Rice prices that are caused by shortages, hoarding and hedge fund speculation.

In 2010 there were record windstorms across the Midwest, 22 Tornado warning in one day in Arizona, Tornados in the middle of urban areas and thousands of trees uprooted in Brooklyn NY; Nashville has a 1000 year flood, Mexico, Pakistan, and several US states had record flooding and tornadoes, record heat wave in California and record drought and heat along the Eastern seaboard, record fires and famine in Russia, flooding and windstorms in Australia:

Send the bill to Massey coal and Billionaire Koch brothers; Charles and David. Pat them on the back for helping create anarchy in nuclear armed countries. It’s a record of their making.

The Billionaires (David and Charles Koch) Bankrolling the Tea Party

http://www.nytimes.com/2010/08/29/opinion/29rich.html?src=me&ref=general

The billionaire brothers who are waging a war against Obama.

http://www.newyorker.com/reporting/2010/08/30/100830fa_fact_mayer

Tax Gasoline and Coal to pay for climate change damages and response actions: Send the Bill for Deaths, lost and wasted resources, global warming caused flooding, tornados, hurricanes, civil wars, lost agricultural crops, and record heat waves to the Coal and Oil industries raking in Hundreds of Billions in profits.

Posted by: Airborne82 | February 16, 2011 2:48 PM | Report abuse

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