UN warned of price hike in food products and a decline in global cereal production

United Nations on 4 October 2012 issued a warning of price rise for meat and dairy products in response to the extreme weather conditions suffered by Europe and associated centers of food production. Food and Agricultural Organization (FAO) with its headquarters in Rome indicated that the global wheat production saw an expected fall of 5.2 percent and other crops meant for feeding the animals could drop down by 10 percent in the year 2012 to that on the available data of year 2011.

With rise in density of population there has been a fall in the production to manage the demand of consumption and this is a reason that products like wheat have seen 25 percent growth in the price in the year 2012. Whereas, Maize and dairy products have witnessed a price hike of 13 and 7 percent within a month’s time, respectively.

The world at present is facing tight conditions in food supply because of decreased cereal production and decline in world reserves. This has turned up to be a reason for hike in prices across the world. This price hike is the reason for decline in demand of these products.

Maplecroft, the Risk Analysis Company has brought forward the data of identified countries that are the suspects of societal unrest and famine, which may steam up the food storage and price fluctuations. These countries have been divided into two categories of Extreme Risk and High Risk Zones.

Countries listed in the group of High Risk Includes Congo, Afghanistan, Ethiopia, South Sudan and Somalia. The countries named in the list of High Risk include India, Pakistan, Yemen, Sri Lanka and Bangladesh. US that is the world’s largest grower and exporter of grain (includes Wheat, Maize and Barley) is also expected to be effected by the harsh weather conditions.