(NaturalNews) Global food prices are nearly as high as they have ever been, the World Bank has warned, and may produce political instability worldwide.
Prices in early February soared to a level just 3 percent lower than the record highs of 2008, when food riots rocked dozens of countries. This marked a 29 percent increase over the course of just one year.
The World Bank food price index climbed 15 percent just between October and January, largely due to volatile trading in futures of corn, soybeans and wheat. Commodities traders expressed their nervousness about political instability in the Middle East and North Africa, as well as record low reserves of corn, soybeans and wheat.
Grain and soybean reserves are alarmingly low around the world. According the U.S. Department of Agriculture, for example, corn farmers will have only an 18-day supply of corn by the start of the 2011 harvest.
As a result, global corn futures more than doubled in the summer of 2010, from $3.50 per bushel to $7 per bushel. Corn prices were also pushed up by growing biofuels demand. Any weather events that affect the 2011 planting or harvest seasons will only cause further price increases.
Wheat prices climbed worldwide between June and December, increasing 16 percent in Pakistan, 45 percent in Bangladesh and 54 percent in Kyrgyzstan. The global price of sugar rose by 20 percent between October and January, while the price of fats and oils increased 22 percent.
Although price increases were lower in industrialized nations such as the United States, where food costs are less directly influenced by the price of raw ingredients, the effect has been more severe in poorer countries. According to the World Bank, higher corn, wheat and oil prices have caused 44 million more people to become extremely poor since June 2010.
People in economically developing countries may spend up to half their income on food alone.
As in 2008, further increases in food prices could fuel political instability, the World Bank warned. For example, both Egypt and Tunisia, sites of ongoing social unrest, are major wheat imporeters.
"That's where the international system needs to try to be aware of these issues, and try to do things at a minimum not to exacerbate food prices," bank president Robert Zoellick said.