World 'Dangerously Close' to Food Crisis, U.N. Says

Global grain production will tumble by 63 million metric tons this year, or 2 percent over all, mainly because of weather-related calamities like the Russian heat wave and the floods in Pakistan, the United Nations estimates in its most recent report on the world food supply. The United Nations had previously projected that grain yields would grow 1.2 percent this year.

The fall in production puts the world "dangerously close" to a new food crisis, Abdolreza Abbassian, an economist with the United Nations Food and Agriculture Organization, said at a news conference last week.

Rising demand and lower-than-expected yields caused stocks of some grains to fall sharply and generated high volatility in world food markets in the latter half of the year. Prices for some commodities are approaching levels not seen since 2007 and 2008, when food shortages prompted riots around the world.

"There is no crisis at this stage, but it could come if we don't act," Mr. Abbassian said. "The numbers are getting dangerously close to what we saw in 2008."

With world stocks depleted, wheat production will need to grow by 3.5 percent and corn production by 6 percent next year to avoid future price shocks, he estimated.

"Just normal production will not do anymore," he said.

Good yields in regions with poor food security like East Africa eased the pain of sharp rises in world grain prices this year, however.

In the long term, however, growing demand for food staples like corn and seed oil for use as biofuels will most likely continue to play a central role in tightening world food supplies, the United Nations warned. Roughly 7 percent of global yields of corn and other coarse grains is being used to make ethanol.

"This is a huge amount that does have an impact on the food markets and on prices," Hafez Ghanem, assistant director general for the Food and Agriculture Organization, told reporters.

In the United States in particular, ethanol production is supported by heavy government subsidies, without which it would be largely uneconomical to manufacture.


View the Original article