FAO draws comfort at lack of food riots

Kenya’s poorest-paid city workers usually flock to illegal streetside stalls to find an affordable breakfast. Partly obscured by smoke rising into the morning air, security guards, drivers and many others cram trestle tables in search of the capital’s cheapest food, although it is no longer as cut-price as it was.

Chapatti, a flatbread, costs 15 shillings (7 US cents) apiece, up 50 per cent from last year but still much less than the 80 shillings it costs in legal, rent-paying venues.

“The price is going up slowly but surely, but we can still afford it,” says Godfrey Nganga, a 40-year-old driver.

The relatively relaxed attitude of Mr Nganga contrasts with the food crisis of 2007-08, when a spike in agricultural prices triggered food riots in poor countries in Africa, including in Kenya’s capital, and elsewhere in Asia and Latin America.

The Food and Agriculture Organisation, the UN body in charge of global food policy, is drawing comfort from the absence of widespread riots, usually the defining element of a food crisis.

The FAO’s food price index, a basket tracking the wholesale cost of wheat, corn, rice, oilseeds, dairy products, sugar and meats, has jumped to a record high, surpassing in December the peak of the 2007-08 food crisis.

Yet so far, unrest has been limited. Mozambique witnessed disturbances after the government announced in September a 30 per cent price rise for bread. Food skirmishes have also emerged in Bolivia, where the government is removing subsidies, and India, after a sharp increase in onion prices prompted national outrage.

To an outsider, the relative calm, compared with riots in more than 30 countries three years ago, is striking. But a closer look reveals big differences to the situation then, differences that make clear why the world is not facing a crisis.

At least not yet.

Abdolreza Abbassian, at the FAO in Rome, says the price of rice, one of the two most critical staples for global food security, remains below the peaks of 2007-08, providing breathing space for 3bn people in poor countries. Rice prices hit $1,050 a tonne in May 2008, but now trade at about $550 a tonne.

The cost of wheat, the other staple critical for global food security, is rising, but has not yet surpassed the highs of 2007-08. US wheat prices peaked at about $450 a tonne in early 2008. They are now trading just under $300 a tonne.

The surge in the FAO food index is principally on the back of rising costs for corn, sugar, vegetable oil and meat, which are less important than rice and wheat for food-insecure countries such as Ethiopia, Bangladesh and Haiti.

At the same time, local prices in poor countries have been subdued by good harvests in Africa and Asia. The US government food aid agency, Usaid, says that while the US wheat price increased by nearly 50 per cent from May to November, the average price of wheat across Afghanistan and Pakistan, a critical area for consumption, rose less than 30 per cent.

Similarly, local corn prices in west and east Africa have diverged from the prices of maize from the US and Argentina, the world’s largest exporters. While the international export price jumped 45 per cent between May and November, it declined by up to 10 per cent in parts of Africa.

Maximo Torero, at the International Food Policy Research Institute in Washington, says that African countries have reaped so far “good crops” this season.

Three years ago, a large number of poor countries had harvested mediocre crops, forcing governments to tap the global market to bridge the shortfall in domestic production. This pushed up domestic prices and triggered riots.

Food aid and agriculture officials say that as long as African and Asian countries do not need to import produce, the impact of rising global prices will remain limited. But a string of bad crops, perhaps because of poor weather, could change that outlook.

Additional reporting by Amy Kazmin in New Delhi