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Friday, September 21, 2012

food prices expectation 2013

food prices expectation 2013 ; Global food prices are rising and are likely to touch an all-time high in 2013 due to drought in some parts of the world, according to a report. that governments' interventions to check high food prices by way of export bans and commodity stockpiling could exacerbate commodity price volatility.

Skyrocketing agri-commodity prices are causing the world to re-enter a period of "agflation", with food prices forecast to reach record highs in 2013 and to continue to rise well into Q3 of the 2013,

Also, the Food Price Index of UN body FAO is expected to rise by 15 per cent by the end of June 2013, adding that world food prices are rising once again as drought in the US, South America and Russia have diminished crop prospects and tightened already low inventory levels.

As a result of drought in key exporting countries and rapid demand growth in developing countries, the combined global wheat, rice, corn and soyabean stocks-to-use is expected to fall to 19.6 percent in 2012-13, only 0.4 percent above 2007-08 levels, it added.

This time around, the most affected commodities are largely used in animal feed (like corn and soyabean) and are not core food staples (such as wheat and rice) of the world's developing economies.

Unlike the staple grain shortage seen in 2008, this year's scarcity will affect feed intensive crops with serious repercussions for animal protein and dairy industries, it said.

"These commodities are currently 30 per cent cheaper than their 2008 peaks. Nonetheless, price rises are likely to stall the long-term trend towards higher protein diets in Asia, the Middle East and North Africa,

In developed economies - especially the US and Europe - where meat and corn price elasticity is low, the knock-on effect of high grain prices will be felt for some time to come,

Increases in commodity stockpiling and interventions such as export bans are a distinct possibility in 2012-13 as governments across the globe react to protect domestic consumers from increasing world food prices

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