Price of Essentials Rises 10%

The price of grains and other food essentials rose 10% in July alone.

The impact of drought, El Nino and other weather events conspired to add to the already soaring prices driven by increased demand from developing nations. Year on year increases, again in July, totaled 6%.

The confluence of forces driving this trend are not mysterious. The global demand pressures have been evident for some time. And experts have been calculating the potential drought affect for months. What has caught many by surprise is the speed and volume of the increases. Expectations had focused on the future, not on the present.

What makes that matter more urgent is that this heightened cost of living comes against a backdrop of stagnant economic growth, relatively high unemployment and an uncertain future. People already struggling to pay their bills are now confronted with even greater challenges.

This is an economic, environmental, political and managerial issue. There does not appear to be a global consensus on solutions, or even on approaches. The historic support for alleviation of poverty has disintegrated in the face of financial pressure from business interests, diplomatic tensions and uncertainty about the efficacy of common agendas. Attempts are resolution will have to wait until after the US Presidential elections in November. The direction the world's largest economy may take could dictate the nature of the response. Even with that, should a full-fledged food crisis emerge with resultant unrest and political ramifications it is not clear what the global community is prepared to do given the diametrically opposed agendas of the competing interests. JL

Tom Bawden reports in the Independent:

The G20 is under growing pressure to call an emergency food summit after the price of essentials jumped by ten per cent on average in July.
New research shows prices are at a record high following "an unprecedented summer of droughts and high temperatures". Cereal prices were particularly hard hit, with maize and wheat rising by a quarter and soybeans by 17 per cent, as poor weather decimated harvests in the US, Russia, Ukraine and Kazakhstan, according to the World Bank. The average global food price in July stood six per cent higher than a year earlier.

"Food prices rose again sharply threatening the health and well-being of millions of people," said World Bank Group President Jim Yong Kim. "Africa and the Middle East are particularly vulnerable, but so are people in other countries where the prices of grains have gone up abruptly," he added.

The World Bank report also warned that prices could continue to rise this year. "Negative factors – such as exporters pursuing panic policies, a severe El Nino, disappointing Southern hemisphere crops or strong rises in energy prices – could cause significant further grain price hikes," the report said.

The G20 said this week that it would check the US Department of Agriculture's updated crop forecast – due on 12 September – before deciding whether to call an emergency meeting.

Colin Roche, from Oxfam's Grow campaign, said: "The G20 must call an emergency summit now before prices spiral out of control and push more people into hunger. This 'wait and see' attitude is unacceptable."

A G20 spokesman said yesterday: "So far we have not reconsidered our actions