The Food Price Problem

In an economic environment dominated by terms such as recession and deflation rising food prices for households in developing economies still remains a problem.

Some measures of food prices have shown a fall but there is still in problem for many on low incomes.

The BBC World Service Index of retail food prices has risen since it was launched a little under a year ago. The index monitors prices of basic food stuffs in eight cities including Washington, Nairobi and Buenos Aires. The average rise is 8% across the cities covered from July last year.

There are significant variations between the cities though, in Nairobi there was a rise of 50%, whereas in Brussels and Washington a double digit fall was experienced.

There is evidence of falling food prieces in international commodity markets. The UN measure that looks at the international prices for meat, dairy, cereals, sugars, oils and fats has shown a decline. Dairy products have shown the biggest decline.

Decline or no decline prices of food are still relatively high - 50% higher than in 2003 (with cereal prices up 80%). Consumers in developed economies have benefited but low income households in developing economies are still struggling.