No rise in food prices, but expect volatility in 2012: FAO

By Nathan Gray

- Last updated on GMT

Related tags: Graziano da silva, Middle east

New FAO chief Jose Graziano da Silva forecasts further volatility in food markets this year
New FAO chief Jose Graziano da Silva forecasts further volatility in food markets this year
Current volatility in food markets is likely to continue however prices could begin to ease into 2012, according to the UN Food and Agriculture Organization (FAO)

Food prices may begin to ease in 2012 but are unlikely to drop drastically from the high levels reached last year, according to new FAO chief Jose Graziano da Silva.

The recently appointed director-general, who is set for a three-and-a-half year tenure at the top, said volatility in food markets was likely to continue throughout the forthcoming year, adding that more people would be at risk of hunger due to economic instability.

"Prices will not be going up as in the last two to three years but will also not drop down. There may be some reductions but not so drastic, in the short term,"​ said Graziano da Silva.

"Volatility will remain, that is clear,"​ he stated.

Price index

Global food prices measured by the FAO hit a peak last February, and have been falling since last June when crops improved and concerns about the economy slowed demand growth.

The recent high price of food has fuelled rises inflation and was said to be a major factor in civil unrest that led to the protests and demonstrations across the Middle East and North Africa – often referred to as the Arab Spring.

Wider funding

The FAO head said he did not expect the economic slowdown in Europe to impact funding for FAO projects, because the amount countries donated was such a small proportion of gross domestic product that they were unlikely to cut it. However he noted that economic problems were likely to increase the number of people at risk of hunger in the world – which the organization estimated at 925 million people in 2010.

"We will have more work to do, with more people hungry, more people unemployed, and we will need new ways to assist them,"​ he said.

Related topics: Market Trends

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