New government data showing sharp gains in U.S. producer and consumer food and energy prices and calls for help from the World Bank by speakers at the International Food Aid Conference to boost shrinking food provisions for the world’s poor this week shed light on the growing impact of high food and commodity prices.
Deadly rioting over high food prices forced the resignation of the prime minister of Haiti last weekend. Riots over food prices and supplies also occurred in Egypt, the Philippines, Indonesia, Ethiopia, the Ivory Coast, Cameroon, Senegal and Burkina Faso. Troops were deployed in Thailand and Pakistan to prevent the stealing of food from fields and warehouses.
There appears to be no immediate relief in sight as grain import costs of the poorest nations are forecast to increase 56% this year after a 37% rise in 2007, the United Nations’ Food and Agriculture Organization said at its annual conference in Brazil this week.
Meanwhile, corn and rice futures prices set new highs at the Chicago Board of Trade during the week.
It is the poor who are hit hardest by high food prices because the same amount of money buys less food and they have no discretionary money to shift to food purchases.
World Bank president Robert Zoellick called on world governments to "put our money where our mouth is" by rapidly fulfilling commitments to give the United Nations World Food Program $500 million in emergency aid by May 1.
At the Food Aid Conference in Kansas City, which includes both government and private groups, emphasis was put on rising food and transportations costs for providing food to world’s poorest nations. In addition to the approximate $2 billion in food aid the U.S. government provides annually as the world’s largest provider to the poor, President George W. Bush this week ordered the release of $200 million to draw down the Bill Emerson Humanitarian Trust, an emergency food reserve for developing nations.
U.S. wholesale food prices rose 1.2% in March due to increases in rice, beef and vegetable prices, the Labor Department said Tuesday in its Producer Prices report, and wholesale energy prices increased 2.9% from February. On Wednesday the Labor Department in its Consumer Prices report said food prices in March increased 0.2% from February and energy costs were up 1.9%.
Much of the focus for U.S. consumers was on record high gasoline and diesel fuel prices rather than food, however. Retail gasoline prices averaged a record $3.438 per gallon the week of April 14 and were expected to head upward as the summer progressed, the U.S. Energy Information Administration said. In addition, the national average on-highway diesel price topped $4 per gallon for the first time, at $4.059 for the same week.
Ironically, much of the money spent at the pump for gasoline and diesel fuel in the U.S. and other developed countries flows to the Middle East, which has amassed "sovereign wealth funds" estimated in the trillions of dollars. Although the countries with the funds have humanitarian programs, they fall far short of their capacity to provide for the world’s poor.