UN Projects Increased Food Price Volatility

From Reuters:

Food prices are likely to become more volatile in coming years, increasing the risk that more poor people in import-dependent countries will go hungry, the United Nations said in an annual report on food insecurity published on Monday.

Global food price indices hit record highs in February and were a factor in the Arab Spring of unrest in north Africa and the Middle East.

Prices have since eased but the U.N. report said economic uncertainty, low cereal reserves, closer links between energy and agriculture markets and rising risks of weather shocks were likely to cause more dramatic price swings in the future.

"Food price volatility featuring high prices is likely to continue and possibly increase," the Food and Agriculture Organization, the World Food Program and the International Fund for Agricultural Development said in the joint report.

"Demand from consumers in rapidly growing economies will increase, population continues to grow, and further growth in biofuels (displacing food crops) will place additional demands on the food system."

The report said that poor farmers and consumers in small importer countries, particularly in Africa, would be more vulnerable to shortages as a result.