World food prices rose in the first quarter of the year for the first time since their all-time high in August 2012, driven by rising demand in China, drought in the United States and unrest in Ukraine.
According to the World Bank, internationally traded food prices increased by a sharp 4.0 per cent. The leap was led by wheat and maize, up 18 per cent and 12 per cent, respectively.
As a result, international food prices in April were only 2.0 per cent lower than a year ago and 16 per cent below their record level in August 2012, the bank’s quarterly food price report said.
“Increasing weather concerns and import demand – and, arguably, to a lesser extent, uncertainty associated with the Ukraine situation – explain most of the price increases,” the report said.
World Bank economists said prices increased despite bumper crops in 2013 and continued projections of record grain harvests and stronger stocks expected for 2014.
Persistently dry conditions in the United States and strong global demand, particularly from China, partly explained the price rises.
Ukraine has role
But Ukraine, the breadbasket of eastern Europe, played a part, posting the largest domestic price increases for wheat and maize.
Ukraine, the world’s sixth-largest wheat exporter, saw domestic wheat prices jump by 37 per cent, driven in part by currency depreciation.
Overall, the international wheat prices soared by 18% quarter-over-quarter.
“Such a steep price increase had not occurred since the months leading to the historical peak in the summer of 2012,” the report said.
International maize prices rose by 12 per cent, with Ukraine, the third-largest exporter of maize, experiencing a 73 per cent rise in domestic prices because of delayed plantings and increasing costs.