August 11, 2010

Wheat price hikes to trigger global food crisis

The World Bank predicts that recent sharp increases in wheat prices could trigger another global food crisis similar to the one experienced some two years ago.

The price of the grain has risen to a 50-year high. Other countries may have to take a cue from Russia, the world's third biggest producer, and impose an export ban.

Bread and other wheat-based products have as a result remained fairly stable.

World Bank Managing Director, Ngozi Okonjo Iweala however believes it is just a matter of time before Africa begins to feel the impact.

"What is surprising is how fast the price rose within four days of Russia announcing its export ban, prices increased by almost 80% before dropping back a little. There are still about a billion people in the world who are hungry and anytime you have this sharp rises in prices it affects many of them," she said.

The grain is going for US$10 a heap. Rising wheat prices has implications for the price of chicken, pork and beef as it remains a key component in animal feed. It is also a substitute for other cereals such as corn.