The UN Food and Agriculture Organisation’s monthly food price index rose 6 per cent in July, reaching levels higher than those pertaining during the food crisis of 20007/08.
Back then, the rise sparked violent protests in countries including Egypt, Cameroon and Haiti. Now, prices are expected to climb as the storm continues to gather. While commodity market speculators and nationalistic export bans helped to drive the 2007 crisis, nature has become a major contributor to the 2012 price rises.
The US midwest is struggling with its worst drought in more than 50 years, causing the department of agriculture to slash its maize crop estimates by 12 per cent in June and by an estimated 15 per cent further yesterday.
The predictable result is record prices for maize, with a 60 per cent price rise since June pushing costs to about €6.80 per bushel.
Wheat prices have doubled over the past two months and drought-driven yield reductions in the soybean harvest are also driving costs for this commodity.
Nature looks set to intervene elsewhere, based on reports from both the US and Japanese meteorological offices.
They indicate that the El Niño weather phenomenon has taken hold in the Pacific Ocean and will persist for at least six months. This affects climate on a global scale, kicking off monsoon rains in some regions while feeding drought in others.
Staple food producers in Australia and along the western Pacific Rim are expected to face crop yield reductions as a consequence, which is also likely to ratchet up international food prices.