Can you guess how many hungry people there are on this planet? Well, this year for the first time the number will be about 1 billion, roughly 1/6 of the world's population. Increasingly, this will put a strain on the food supply chain.
The years 1997-2007 saw a steady rise in agricultural commodity prices with a sharp spike last year. This trend is likely to continue over the next 10 years with prices rising 10-30%.
The Food and Agriculture Organization (FAO) of the United nations is forecasting slightly lower prices this year due to the weakness in the general economy.
Both the FAO and the Organization for Economic Co-operation and Development (OECD) said there are risks ahead and that "further episodes of strong price fluctuations cannot be ruled out nor can future short lived crises"
Most analysts and food executives believe that agricultural commodity prices have experienced a structural upward shift in costs which will be exacerbated by water scarcity and climate change.
To summarize, global poverty is increasing and upward pressures on food prices are likely to continue. Water and climate changes are key to the stability of prices going forward.
Do you believe that food costs will rise this year?
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