Despite a period of sustained global growth, the world economy is now confronting an uncertain and difficult period threatened by rising food prices and even acute shortages in some countries. In the last few years, the prices of consumer goods especially food items have increased at a faster pace than headline inflation in the world economy. This article looks at the reasons for the rising food prices and the implications especially in Guyana.
Agricultural commodity prices began to rise sharply in 2006, the FAO food price index rose on average by 9 percent in 2006 followed by a massive increase of 23 percent in 2007. The surge in food prices has been most notable in dairy products which on average increased by nearly 80 percent followed by edible oil at 50 percent and grains at 42 percent respectively. The Economist (12/07/07) in an article entitled “Food prices: Cheap No More” stated that in September 2007 the world price of wheat rose to over US $400 a tonne, a record high when two months earlier it was around US$200, while the price of maize (corn) exceeded a record high US$175 a tonne, some 50 percent above the 2006 level. The Economist Food Price Index is now at its highest since it began in 1845 rising by over one third in the past year.
