Global food prices continue to fall despite climate concerns
This article in the Financial Times elaborates on the impact of extreme weather on food prices and on the reasons for the declining global food prices despite climate concerns and the impacts of El Niño. International food prices, including sugar and dairy, have been falling for the past four years, with only one exceptional spike in October, particularly for sugar. The sudden spike in sugar prices illustrated the economic impact of the unusual weather events triggered by El Niño, which is expected to further disrupt commodity prices in 2016. Nevertheless, agricultural prices, as measured by the FAO’s price index, have fallen almost 30% since 2011 as a result of increased production. The index has been sliding in part because of the strengthening US dollar, which is the benchmark for global commodities, as well as the surplus in some food basics. In 2015, all agricultural sectors covered by the FAO’s food price index showed declining prices. Meanwhile, the FAO continues to stress that food security remains a great concern. People in some 33 countries, with the majority in Africa, may face food shortages either because of El Niño-caused drought and floods, or violent conflicts, particularly in Syria and Yemen.