Food Prices and Supply

Kirk Condyles for The New York Times

Updated: April 7, 2011

For the second time in three years, food prices began to soar in late 2010. Some food experts thought the increases could have been a factor in the unrest that swept the Arab world in early 2011.

In 2008, food riots broke out in developing countries around the world, as the prices of staples, particularly rice, jumped sharply. Good harvests and a drop in demand due to the worldwide recession eased those shortages in 2009.

Prices began rising steadily again in the summer of 2010. 

In January 2011, a price index compiled by the  United Nations Food and Agriculture Organization that tracks 55 food commodities for export hit its highest level since tracking began in 1990. Countries not dependent on food imports are less affected by global volatility. Still, food prices are expected to rise 2 percent to 3 percent in the United States in 2011.

Four main factors are seen as driving prices higher: weather, higher demand, smaller yields and crops diverted to biofuels. Volatile weather patterns often attributed to climate change are wreaking havoc with some harvests. Heavy rains in Australia damaged wheat to the extent that much of its usually high-quality crop has been downgraded to feed, experts noted.

This has pushed the demand and prices for American wheat much higher, with the best grades selling at 100 percent more than they were a year ago. The autumn soybean harvest in the United States was poor, so strong demand means stocks are at their lowest level in 50 years.

In addition, an ever larger portion of the world’s crops is being diverted for biofuels, as developed countries pass laws mandating greater use of nonfossil fuels and as emerging powerhouses like China seek new sources of energy. But with food prices rising sharply in early 2011, many experts began to call on countries to scale back their headlong rush into green fuel development, arguing that the combination of ambitious biofuel targets and mediocre harvests of some crucial crops is contributing to high prices, hunger and political instability.