The Transmission of Global Food Prices

Triple Crisis bloggers C.P. Chandrasekhar and Jayati Ghosh published the following article for International Development Economics Associates (IDEAs) on the high transmission of recent international food price changes to domestic food prices in many developing countries.

Clearly, we are back in another phase of sharply rising global food prices, which is wreaking further devastation on populations in developing countries that have already been ravaged by several years of rising prices and falling employment chances. The food price index of the FAO in December 2010 surpassed its previous peak of June 2008, the month that is still thought of as the extreme peak of the world food crisis.

Some of the biggest increases have come in the prices of sugar and edible oils. But even staple prices have shown sharp increases, with the biggest increase in wheat prices, which doubled in the second half of 2010 and have been increasing since then. Rice prices have been relatively stable in global trade over the past year in comparison, but are still much higher (by around 48 per cent) than they were at the start of 2008.

Read the full article at IDEAs.

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