World Bank sees high food prices easing/"Prospects for decline in 2012 food prices remain favorable, due to weaker consumer demand as a result of a sl

World Bank sees high food prices easing




WASHINGTON: The World Bank on Tuesday said high food prices were likely to dip this year as the global economy slows but potential risks from higher oil prices and weather could send them back up.

"Prospects for decline in 2012 food prices remain favorable, due to weaker consumer demand as a result of a sluggish global economy, expected declines in the price of energy and crude oil, and strong forecasts for 2012 food supplies," the World Bank said in a statement.

The development lender noted that average food prices in 2011 ended 24 percent higher than in 2010, despite an 8.0 percent drop in the fourth quarter.

"The worst food price increases may be over but we must remain vigilant," said Otaviano Canuto, head of the World Bank's Poverty Reduction and Economic Management program.

"Prices of certain foods remain dangerously high in many countries, leaving millions of people at risk of malnutrition and hunger. Governments must step up to the plate and implement policies to help people cope."

The World Bank pointed to maize prices that jumped 117 percent in Kenya and 106 percent in Mexico between December 2010 and December 2011. In Belarus, wheat prices increased 88 percent over the same period, while rice prices rose 86 percent in Uganda.

Among the factors that could stoke food prices is a pickup in oil prices as a result of unrest in producer countries, the Washington-based institution said. That could raise demand for biofuels, turning food crops into fuel crops.

Weather changes, such as the weather pattern La Nina being felt in the Pacific Ocean, are expected to disrupt the maize and soybean crops in Argentina and Brazil this year, it said.