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Opinion divided over threat of world food market volatility28 Oct 2010Source Procurement Leaders While the prices of several soft commodities hit the highest levels in two years this week and food volatility has caused some authorities to point to a global food shortage on the scale of 2008, others are sceptical of the sustained impact the current volatility will have. Last week, the World Bank reactivated its Global Food Crisis Response Programme (GFRP), dedicating up to $760m to countries at risk of food price volatility in response to the current economic climate. In announcing the program’s extension, World Bank President Robert Zoellick cited "growing concern among countries about continuing volatility and uncertainty in food markets."?An especially hot summer in the US, droughts in countries including Russia and Brazil and heavy rain in Canada and Europe have hit many grain and oilseed crops this year. This has raising concern of a severe squeeze in food supplies and a repeat of the 2007-08 food crisis. Food prices worldwide are not yet at the same level as 2008, but the UN's food price index rose 5% last month and now stands at its highest level in two years. But the World Development Movement in London warned that food speculation by hedge funds, pension funds and investment banks was likely to prompt further inflation. Read more here |
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