There are some much-needed good news on the food price front. From the Food and Agriculture Organization (FAO) of the United Nations:
“The FAO food price index has dropped for the first time after eight months of continuous price spikes, FAO announced today.
The index averaged 230 points in March 2011, down 2.9 percent from its peak in February, but still 37 percent above March of last year.”
This decline in food prices is due primarily to a decline in the prices of sugar (down 10 percent in March relative to February), oils (down 7 percent), and sugar (down 2.6 percent), which are three of the five components of the FAO’s food price index, the others being meat (unchanged) and dairy (up 1.9 percent).
That the price of cereals decreased is cause for celebration. Indeed, when I discuss how food prices may well cause political unrest, what I really refer to is the price of cereals, which constitute the bulk of poor people’s diets the world over. It is only when people get wealthier that they substitute away from cereals toward meat.
But when people are wealthier, they are also more likely to demand better governance (or they are more likely to be wealthier as a result of better governance, causality likely runs both ways), so that food prices matter less in fostering political unrest when people are wealthier.