OVER the past few months, the rise in food prices worldwide has put agriculture officials, traders, sellers and consumers on edge as it recalled memories of the food crisis three years ago.
In February, the head of the Food and Agriculture Organization (FAO), Jacques Diouf, warned that rising commodity prices could put the world on the brink of a food crisis, a situation similar to 2008, which saw food riots and political instability in many countries.
Diouf blamed higher demand, poor agricultural output due to weather disturbances and inadequate infrastructure, unbridled speculation on commodities, and surging fuel prices amid instability in the Middle East for the high costs of food.
“We are indeed on the verge of what could turn out to be another major food crisis. The FAO food price index (FPI) at the end of 2010 returned to its highest level,” he said.
In its March 2011 report, FAO said the FPI averaged 236 points in February, up 2.2 percent from January and the highest (in both real and nominal terms) since January 1990, when the UN started the measurement.
The index, which registered new highs for the past eight months, breached the 213.5 points recorded in June 2008 at the height of the food crisis.
Prices of major staples like rice, wheat and corn have been rising since last year. The FAO cereal price index averaged 254 points in February, up 3.7 percent from January and the highest since July 2008.
Wheat registered a significant increase in prices at $362 per ton, although this was 25 percent lower than its peak in 2008, due to weather disasters in wheat-producing countries like Australia and China.
Rice, the Philippine staple, fared better than the other cereals due to improved harvests in major rice-exporting countries like Thailand and Vietnam. At $554 per ton, it was 4 percent below its level in February 2010 and 42 percent below the peak in May 2008, FAO said.
Of all the commodities monitored—dairy, oils and fats, meat and sugar—only the sugar sector saw a slight decrease. It averaged at 418, 16 percent lower than January figures.
The price of meat averaged 169 points in February, up 2 percent from January, while the oils/fats sector rose marginally to 279 points in February, just below the peak in June 2008. The dairy index averaged 230 points in February, up 4 percent from January.
In the Philippines, data from the Bureau of Agricultural Statistics (BAS) showed the country appeared to be bucking the global trend.
Although there were price increases in certain products in February, Agriculture Assistant Secretary Salvador Salacup said adequate supply and low demand had kept prices affordable or stable as of early March.
“Demand is not picking up. Market forces are a big factor,” he said. Demand in the summer months tend to be slow as classes are winding down and students go on vacation, he said.
Rice prices are stable, while farm-gate prices of vegetables, meat and livestock either decreased after a rise in prices or returned to normal levels, BAS data showed.
The February BAS report also showed that prices of beef and pork products were generally stable while those of poultry products registered declines. There was an upward adjustment of P5-P10 per kilo for beef and pork in February, it said.
Dressed chicken registered price declines of P5 per kg in certain Mindanao cities, BAS said.
In Metro Manila and Tacloban City, a price increase of P5/kg was noted. As of the second week of March, Salacup said the price of chicken at farm gate decreased to P70 from P80.
Rice was also stable. While there had been a decline in total inventory, Salacup said the government still had a 95-day stock, which keeps the prices stable.
The National Food Authority was expected to import 600,000 metric tons of rice in the third week of March to fill the country’s stock requirement for this year.
This was much lower than expected as the Department of Agriculture anticipated palay harvest to hit 7.6 million metric tons, a 15-percent increase from the output in the first semester last year.
Economist Rolando Dy of the University of Asia and the Pacific said the Philippines was lucky because the price of its main staple did not experience a big upward movement in the world market, unlike wheat.
“Wheat prices went up by 80 percent. For rice, it wasn’t that big. So lucky for us rice eaters,” Dy said, noting that rice accounts for about 20 percent of the food budget for an average Filipino.
Salacup said certain factors could drive prices higher in the next few months. When school opens in June, demand would surge again, he said.
There is also the matter of unabated fuel price hikes, which could compel rice importers and livestock growers, who would be grappling with higher freight and input costs, to pass on the increments to consumers. –Kristine L. Alave, Philippine Daily Inquirer
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