Food and beverage prices to drop by 5.7% in 2013 as global food security improves
Bumper corn and wheat crops are expected to help the price of commodities fall this year, increasing food affordability and security, says the latest scores from the Global Food Security Index (GFSI).
The Economist Intelligence Unit’s (EIU) Global Food Security Index (GFSI) was commissioned by DuPont to deepen the dialogue on food security, evaluates the affordability, availability and quality of food across 105 countries.
Jan Lenferink, Regional President EUROW, DuPont Nutrition & Health, told FoodNavigator-USA that the GFSI looks at the root causes of hunger.
“The Index will catalyze stakeholder collaboration to develop solutions for pressing issues such as food affordability, availability, nutritional quality and safety.
“Not only will it provide an objective, worldwide perspective on food security, but it will give course for action. Food security affects us all and is a goal that will only be accomplished through working together.”
All eyes on the US
And, according to the index’s latest data, the outlook for 2013 is positive. While global corn prices rose during 2012, in part because a drought in the US helped drive global inventories to a six-year low, farmers in the US will plant the largest crop in 77 years.
The EIU’s outlook for the rest of 2013 extend data from the FAO index, which showed that the price of foods purchased most often by the food insecure – cereals or staple crops – dropped by 2.4% during the quarter.
Despite the strong supply forecasts for 2013, concerns over the weather challenges experienced by US farmers could dampen the optimism Unexpectedly cold weather delayed the planting season in some places; should farmers be unable to make up for those delays, prices could rise higher than the EIU forecasts, posing greater risks for global food security later in the year.
“The global economy is slowly gaining momentum, which should boost employment and incomes and support food security,” said Leo Abruzzese, Global Forecasting Director for the EIU.
“At the same time, we expect the prices of soft commodities to fall. Our latest forecast is for food, feed and beverage prices, overall, to drop by 5.7% this year.”
Feeding the world
DuPont’s Lenferink added that the challenges to feeding the world grow greater each day.
“Those challenges include: a global population that will reach 9 billion by 2050; increasing shortages of water and arable land, especially in developing nations where food security is already a pressing issue; and the fact that billions of people in the developing world already spend half to three quarters of their income on food, according to the World Bank, hampering economic growth where it is needed most,” he said.
DuPont has committed $10 billion to R&D, 4,000 new products, and 2 million engagements with young people by 2020.
“DuPont developed these corporate goals to enhance global food security by the end of the year 2020 and has made clearly defined commitments to reaching those goals,” explained Lenferink.
“The purpose is to encourage all DuPont employees to do our part to help alleviate hunger. The work will center on producing more food; enhancing nutrition and food and agriculture sustainability; boosting food availability and shelf life; and reducing waste.”
US, Switzerland and Norway still lead the pack
The latest scores from the GFSI show that the global average affordability score at end-March climbed to 52 from 51.7 in December 2012 (where 100 equals the best result). In the US, Switzerland and Norway—the top three countries in the index for the quarter—affordability increased by 0.23 points, on average.
China, Panama, Chile and several other countries with the greatest gains in food affordability scores experienced strong per capita income growth and relatively low vulnerability to global food prices. In past quarters, changes in global food prices were the primary driver of fluctuations in affordability scores.
