Low food prices won’t last

2010-02-13 00:00

CAPE TOWN — Consumers should not be misled by the current decline in food inflation. This trend could reverse itself in less than no time, with global food prices again rising steeply.

This warning comes from Jannie de Villiers, executive director of the National Chamber of Milling, which recently participated in an International Grains Council debate on food security.

De Villiers says that two years ago it was the energy crisis pulling the trigger and sending food prices sky-high. Grains, which are a cheaper alternative, were then being used to produce biofuel.

The global recession has since depressed the demand for resources, including oil, and the demand for grains as an alternative fuel has tapered off.

At the same time there is an overproduction of grains, which has reduced the pressure on grain prices.

But De Villiers warns that this is the lull before the storm because the pressure on resources will build up as soon as global economic growth resumes, when food security will then again be at issue.

 

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