Global food prices have eased significantly from their record highs in the first part of 2008. As a worldwide economic downturn has gathered pace, commodity markets have weakened significantly. By October 2008, the UN Food and Agriculture Organization’s Food Price Index stood at 164, the same level as in August 2007, and 25% lower than the Index’s high of 219 in June 2008.
However, this does not mean that policy-makers around the world can start to breathe a sigh of relief. For one thing, even at their somewhat diminished levels current prices remain acutely problematic for low-income import-dependent countries and for poor people all over the world. The World Bank estimates that higher food prices have increased the number of undernourished people by as much as 100 million from its pre-price-spike level of 850 million.
Looking to the medium and longer term, moreover, food prices are poised to rise again. Although many policy- makers have taken a degree of comfort from a recent OECD/FAO report on the world’s agricultural outlook to 2017, which argued that food prices would shortly resume their long-term decline (even if they remained on average higher than their pre-spike levels), it largely overlooked the potential impact of long-term resource scarcity trends, notably climate change, energy security and falling water availability.
This Chatham House Report, by contrast, argues that these trends – together with competition for land and higher demand resulting from increasing affluence and a growing global population – represent a major challenge for global food security.
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