Prices of Key Staples to Rise by 120-180% by 2030: Oxfam
Associate Editor, CNBC
The prices of staple crops will more than double in 20 years, unless fundamental changes are made to the international food system, warns the international charity Oxfam.
The report forecasts that prices for key staples such as maize will increase by between 120 and 180 percent by 2030, with up to half of this increase being prompted by reductions in supply caused by climate change.
Soft commodity prices have risen dramatically in 2011 as poor weather conditions in key producing regions have cause a fall in yields and key exporters, including Russia and Ukraine, put in place export bans to curb domestic inflation.
Higher oil prices have also impacted on the soft commodity market, as input costs for fuel and fertiliser rise.
These factors have rattled the global grain markets and led to surges in core grain prices over the last year, resulting in the knock-on effects of inflated food prices for consumers and inflationary pressures in both the developed and developing world.
Oxfam claimed that by 2050, demand for food would rise by 70 percent, while production would not keep up with demand, with growth rates actually declining.
“We are sleepwalking towards an avoidable age of crisis. The food system must be overhauled if we are to overcome the increasingly challenging pressing challenges of climate change.” Barbara Stocking, chief executive at Oxfam said.
In May, the Food and Agriculture Organization of the United Nations warned that 2011 global stocks of cereals would be at their lowest level since 2008, with wheat stocks also low.
Utilization of cereals, however, is heading for record highs this year, presenting a further supply-demand imbalance.
The UN has predicted that the world population will rise to over 9 billion by 2050, and the use of cereals is likely to increase at a faster rate, as wealthier, more urbanised populations consume higher protein and more calorific diets.
Oxfam is calling on the leaders of the G20 countries to agree new rules to govern food markets, transparency in commodities markets and regulate futures markets, scale up food reserves and end bio-fuel policies.