The World Bank has announced that global food prices rose a further ten per cent last month. The rise is mostly due to the effects of the United States drought, which has severely impacted on the country’s major crops and sparked rallies in global grain markets.

In addition to the problems in the US, the world’s largest maize and soybean producer, major wheat growing regions including the southern EU states, Balkans and Black Sea region have been hit hard by arid conditions. Conditions could lead to another drought in Australia, which has only recently regained drought-free status for the first time in a decade.

At the beginning of the month, the UN Food and Agriculture Organisation released the results of its Food Price Index assessment, which measures the cost of staple foods around the world. The FAO said that food prices had risen 6 per cent in July.  

On Thursday, the World Bank said the price rises could spark another food crisis, like the last severe crisis seen in 2008. However, the announcement coincides with World Water Week in Stockholm, the organisers of which have said that, despite food shortages and rising prices, per capita food production has risen consistently around the world, even during the 2008 crisis.

Although food prices fell in June, between June and July, they climbed again; maize and wheat reaching record highs after prices rose 25 percent and soybeans rose 17 percent on the markets. Throughout the deteriorating situation, only rice has remained constant.

Jim Yong Kim, president of the World Bank, said this week, "Food prices rose again sharply threatening the health and well-being of millions of people. Africa and the Middle East are particularly vulnerable, but so are people in other countries where the prices of grains have gone up abruptly."

Echoing statements made earlier this month by FAO head Jose Graziano da Silva, the World Bank president said biofuel targets, such as the United States’ biofuel mandate, which sees 40 per cent of the country’s maize going into biofuel production, are exacerbating the situation. Although marketeers have downplayed the situation, development and anti-poverty organisations have reignited the ‘food versus fuel’ debate over biofuels as grain prices have begun to rise once more.

Anti poverty organisation Oxfam said the report serves as “yet another alarm bell” for world leaders in the Group of 20, who the organisation has accused of inaction over the escalating situation. However, spokesperson Colin Roche said “It's still not clear whether they are listening.”

Roche added, "The report says that three-quarters of the change in the prices of internationally traded cereals will be transmitted to domestic markets, and Oxfam is already seeing the devastating impact of food price volatility in developing countries that rely on food imports. The G20 has decided to wait for September's US crop report before deciding whether to take action on food prices but they must call it now before prices spiral out of control and push more people into hunger. This 'wait and see' attitude is unacceptable especially when the World Bank report has warned that prices are expected to remain high and volatile."

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