Food prices near record peaks and volatility in commodity markets are driving the lives of the world’s poorest people to the edge of survival, the World Bank warned Monday.
Global food prices in July were 33 percent higher than a year ago, while oil prices were up 45 percent, driving up the price of fertilizers, the development lender said in a quarterly report.
“Persistently high food prices and low food stocks indicate that we’re still in the danger zone, with the most vulnerable people the least able to cope,” World Bank president Robert Zoellick said in a statement.
“Vigilance is vital given the uncertainties and volatility that exists today. There is no cushion.”
According to the bank’s latest Food Price Watch report, prices that are now near the record highs of 2008 have been a major contributor to the emergency in the Horn of Africa.
Over the last three months, reportedly 29,000 children under five have died in Somalia and 600,000 children in the region remain at risk in the crisis threatening the lives of more than 12 million people, the World Bank said.
“Nowhere are high food prices, poverty and instability combining to produce tragic suffering more than in the Horn of Africa,” Zoellick
said, noting the bank was stepping up short-term help through safety nets to the poor and the vulnerable in places like Kenya and Ethiopia.
The 187-nation lender said it was providing $686 million to save lives, improve social protection, and spur economic recovery and drought resilience for people in the Horn of Africa.
Zoellick, who has repeatedly urged the Group of 20 major economies this year to make the food crisis a top priority, said more funds were urgently needed for the region.
Of the total resources committed so far — $1.03 billion — $870 million have been assigned to emergency efforts, with the remainder dedicated to longer-term objectives.
An estimated additional $1.45 billion is needed, the bank said.
“The global food prices that continue to be high and the Horn of Africa humanitarian disaster have demonstrated the urgency for tackling long-term and structural factors that contribute to food insecurity for the vulnerable, keeping in mind the increased risk of recurring droughts because of climate change,” the report said.
The World Bank highlighted volatility in food prices, pointing to an 11 percent rise in rice prices between May and July following a general decline since February.
Domestic food prices continued to fluctuate widely across the globe, it said. The annual price changes in maize in the 12 months up to June 2011, for example, ranged from increases of 100 percent or more in Kampala, Mogadishu, and Kigali markets to reductions of 19 percent in Port-au-Prince and Mexico City.
And rising food prices have been major drivers of general inflation in a number of countries.
In China, the prices of pork, shrimp and fish rose sharply in the recent quarter, leaving food price inflation at 14.6 percent in June over a year earlier.
In Vietnam, food price inflation was up 30.6 percent, due to locally produced food items such as meat and vegetables.
“However, inflation in these countries is expected to moderate in the near future as local supply improves and assuming monetary policy is tightened to address macroeconomic vulnerabilities,” the bank said.