While looming large in parts of the region, the threat of a food crisis can be effectively addressed with the right mix of social and fiscal responses, said the region’s top World Bank officials
Like two sides of the same worn coin, the spiralling costs of foodstuff across the globe have raised the spectrum of a new food crisis in some Caribbean countries, while simultaneously benefiting most others in Latin America with windfall profits, the region’s top World Bank officials have said.
A World Bank assessment of the commodity spike states that, since February 2009, international food prices have risen by more than 30 per cent, and agricultural raw material prices by more than six per cent. During the same period, oil and metal prices have doubled.
“Virtually all the commodities that matter for the region are partaking in this strong wave of price increases. For certain countries, the rise in non-food commodity prices can more than offset the increases in the prices of imported food,” says the report –Vulnerability to Food Price Increases in (Latin America and the Caribbean) LAC, 2011.
It said that clear winners from this situation are most South American countries. Maize, soybean oil, and palm oil have registered the largest increases —over seven per cent per month in the September/November period of 2010.
Gold, sugar, copper and coffee have experienced increases of more than five per cent per month over the same period, dramatically improving the terms of trade of South American countries heavily reliant on such food and mineral exports, such as Chile, Peru, Colombia, Brazil and Southern Cone nations. The World Bank said that left out of this bonanza are countries in Central America and the Caribbean, where the Bank analysis found several countries highly vulnerable to a potential food crisis in light of their extreme dependence on food imports, coupled with high poverty rates.
These countries include Haiti, Grenada, Jamaica, Suriname, and St Vincent and the Grenadines. A wider analysis, taking into account high poverty rates combined with limited abundance of commodity exports — the lifeblood of most regional economies — expands this map to include Mexico, Guatemala, Nicaragua, Guyana and Belize.
The impact of higher food prices on the most vulnerable can be devastating, according to the report. It notes that, already, 44 million people have been added to the ranks of the poor globally since June 2010, following the food price spike. (Excerpt from CMC)
