Resource information
Yet the current situation differs from
2007-2008 in critical respects. First, recent international
price increases are more widespread across agricultural
commodities than in 2008, when price spikes were led by few
grains such as wheat and rice. Second, natural resources are
affecting food production: land and water constraints are
more binding than in the past and weather induced production
shortfalls are more of a factor now than it was 2008.
Climate change also adds to this uncertainty, particularly
since a larger share of grain exports are being produced in
areas more exposed to climate variability. Third, long term
structural changes in the markets are more clearly a major
factor this time, as demand for feed and income-elastic
foods under sustained and widespread income growth in
emerging countries is increasing steadily. Fourth, the
global stocks/use ratio for major cereals, which used to
hover in the range of 30-35 percent in the 1980s and 1990s,
has been around 20 percent after 2003 due largely to
long-term policy changes in high-income countries; and
stocks of some critical players are now at all-time lows.
Global markets are currently experiencing the second sharp
spike in food prices in the last four years. While no one
has a crystal ball to predict with confidence the future
prices of food products, there are good reasons to believe
that structural factors affecting both supply and demand,
discussed in this report, have recently evolved in ways that
will increase the average levels and volatility of prices
above those of recent decades. Ensuring that the
world's populations, and particularly vulnerable
groups, are adequately fed is one of the most important
contributions of the World Bank to the global public
good's agenda. This report describes how the current
situation is affecting countries in the Latin America and
Caribbean region, including the impact on different groups
within countries, and proposes strategies to best assist our
client countries in responding.
