The world food prices have remained high and volatile, adding to the strains the global economy has been going through in recent times.

According to the latest Food Price Watch released by the World Bank, the prices of grains rose by 30 per cent between September 2010 and 2011, with that of maize increasing by 43 per cent, rice by 26 per cent and wheat by 16 per cent.

However, over the last quarter, an increase of three per cent in the prices of grains was roughly offset by a corresponding fall in the prices of fats and oils.

Though the food price index of the bank dropped five per cent from its February 2011 peak and came down marginally in September by one per cent, it remained 19 per cent above its September 2010 levels.

The volatility in prices is higher in low-income countries and it is expected to persist in the medium term due to multiple global and domestic factors.

The structural factors contributing to the volatility include rising populations and changing dietary habits, increasingly inter-twined relations between food and energy prices and rising production of bio-fuels, says the report.

Favourable outlook

On the positive side, the pressure on prices is likely to be relieved by a favourable outlook on supply and stocks. The global wheat stocks are forecast to reach a 10-year high in 2011-2012, while the production of maize will rise by four per cent with higher output in Argentina, Brazil, China, Russia and Ukraine.

An expected bumper harvest in India following good monsoon rains is expected to increase the global rice production in 2011-2012.

In the current scenario, the report warns that developing countries might have now limited resources to protect vulnerable populations following the economic crisis and stimulus spending. In addition, fears associated with the global economy may affect medium to long-term investments in agricultural research and more productive agricultural techniques.

Meanwhile, the Food and Agricultural Organisation (FAO) has reported a four per cent drop in its Food Price Index in October from the level in September.

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