Europe and Australia are said to be one of the biggest producers of crops. However, when droughts and floods had attacked the said countries respectively, prices of cereals such as wheat, rice, and maize are more likely to increase further.
Under the United Nations is the Food and Agriculture Organization that started to monitor the prices of goods in the year 1990. It had reported that the production of cereals are said to have an overall decline last year.
In this wise, most consumers is expected to face the increasing amount in prices for foods. It may even affect the global community as food prices will be raised even higher based on the United Nations report.
In February, the UN Food Price Index increased to 2.2%. Reports have said that prices of commodities apart from sugar have relatively increased.
On the other hand, as an effect of the continued political unrest that is going on in the countries of North Africa and in the Middle East, oil prices are observed to be on hike hitting two and a half year highs.
Indeed, the rising price of oil tends to make the situation more difficult and likewise uncertain.
David Hallman of FAO says that, “This adds even more uncertainty concerning the price outlook just as plantings for crops in some of the major growing regions are about to start.”
Countries who are poor and could have been generating low-income will be suffering for a greater impact when prices of foods will have to increase.
Furthermore, a prediction regarding the demand for agricultural products for food, animal feed and the production of fuel will also rise.
Higher food prices warn about the upcoming global economic pressures that seem to go worse.
In addition to that, even the International Monetary Fund (IMF) is as well “extremely concerned” regarding the situation of the global economy nowadays.
Behind this current state, FAO even have that positive outlook knowing that the agricultural areas in Russia, Kazakhstan and Ukraine are observed to undergo gradual recovery from the droughts and wildfires that it had suffered on the previous year.
