Written question asked by Claire Curtis-Thomas (Labour) on Thursday, 20 November 2008, in the House of Commons. It was due for an answer on Monday, 24 November 2008. It was answered by Ivan Lewis (Labour) on Wednesday, 26 November 2008 on behalf of the Department for International Development.

Food: Prices

Question: To ask the Secretary of State for International Development what assessment his Department has made of the effect of the global financial situation on global food prices.

Answer: World cereal prices have declined substantially over the last few months, with wheat falling the most by 60 per cent. to $248 from its peak in March. The current financial crisis is a potentially important factor, but this is currently empirically unproven. Other important factors include record 2008 harvests, the steep drop in world crude oil prices, and appreciation of the US dollar.The Food and Agriculture Organisation suggest that if current difficulties in access to finance continue, next season's plantings and output could be affected, leading to another price increase in 2009 and further food insecurity. While global prices may continue to fall until the end of the year, the economic slowdown could reduce yield growth as producers spend less on irrigation, fertilisation, and other inputs necessary to boost yields.

Secondary information