Analysts foresee humanitarian crisis at global scale
A humanitarian crisis at a global scale is to be expected if the food prices are to surge, said a note issued by Japanese bank Nomura. In its Food Vulnerability Index, 50 of the most vulnerable countries are totalling 59.1% of the world's population, whilst the global GDP shared by these economies reaches only 26.1%. "The countries most vulnerable to a surge in food prices account for a small portion of the world economy, but make up a much larger share of the world population. A sustained surge in food prices is unlikely to cause a global economic recession, but it could cause a humanitarian crisis on a global scale," wrote the analysts in their note, quoted by CNBC.
Even if most of these countries are located in regions such as Africa, Asia and Middle East, in the top 5 you cand find Montenegro, a European country from the Balkans. An increase in food prices is expected to make the inhabitats to spend a higher proportion of their incomes on food, at the expense of other essentials. Analysts believe that climate change, higher oil prices and a depreciation in the US dollar could all trigger the increase in food prices and the concerns over food security could result in social unrest, which could eventually force governments to intervene by reducing exports. Libya, followed by Tadjikistan, Montenegro, Syria and Algeria are the most vulnerable countries in the Nomura Food Vulnerability Index. The countries included in the Index have a profile that comprises "lower GDP per capita, high rates of food sharing in household consumption, and are large net food importers".
Since the beginning of the year, meat prices have increased in several regions of the world due to a large bio-security crisis that impacted the swine population in Asia and Europe. Increased demand for animal protein in countries such as China, Vietnam or even in some European countries made meat prices jump to levels never seen before and impacted the global meat trade. According to several analysts, the effects will last for at least 5 years, with China turning into a key market for red meat and poultry.
The latest FAO Food Price Index shows that global food prices rose in October for the first time in five months. Quotations for cereals, sugar, vegetable oil and meat were up, while dairy was the only commodity to see a decline in price.
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