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Category: Economics

Food Prices Remained Stable in April, But…

So says the Food and Agriculture Organization (FAO) of the United Nations in the May issue of its Global Food Prices Monitor:

“The FAO Food Price Index averaged 232 points in April 2011, virtually unchanged from the revised March estimate, 36 percent above April 2010, but 2 percent below its peak in February 2011.”

Still waters run deep, however, as this apparent food price stability masks a considerable amount of heterogeneity:

“A sharp increase in international grain prices in April more than offset declines in dairy, sugar and rice, while oils and meat prices were mostly unchanged. The FAO Cereal Price Index averaged 265 points, up 5.5 percent (14 points) from March and 71 percent from April 2010. The FAO Oils/Fats Price Index which had fallen by 7 percent in March, was nearly unchanged in April. The FAO Sugar Price Index averaged nearly 348 points, down 7 percent (or 25 points) from March and 17 percent below its January record. The  FAO Dairy Price Index averaged 229 points, down 2.4 percent from March. The FAO Meat Price Index  remained stable at a record level of nearly 173 points.”

For the poor in developing countries, whose diets mostly consist of carbohydrates, this is far from good news. The recent food riots in Burkina Faso and Uganda seem consistent with this pattern of changing food prices.

Index Insurance in Africa

From a post on the New York Times‘ Opinionator blog:

“The insecurity of farming sabotages yields even when the weather is good.  Because of the risk, many farmers are unwilling to bet all their money on a crop, so they sow only a portion of their land.   Or they use poor quality seeds because they do not want to increase their risks by spending more.  Risk makes it very difficult for farmers to get credit to buy needed seeds, fertilizer, herbicides or insecticides, so their yields are stunted.  These are people who can ill afford to get less than the maximum from their plots.

Weather insurance for small farmers has always faced numerous barriers.  But throughout east Africa today there are projects finding creative and innovative ways to overcome them.”

This is quite à propos, as I am going to Washington, DC this weekend for the Index Insurance Innovation Initiative (I4) technical workshop, which will convene the I4 grant recipients to discuss the technical details of index insurance implementation and evaluation.

(HT: Chris Paul.)

 

Does the WSJ Want You to Think Speculation Caused Rising Food Prices?

Apparently:

“While prices of many agricultural commodities have soared, farmers received just 7.49 cents for a pound of onions in April, down from 29.9 cents a year ago, in part due to a big harvest. Futures trading in onions — unlike other farm goods — is banned, which prevents the pungent bulb from being used as an investment vehicle.”

The syllogism apparently goes: