in which year was price hike and poverty at its peak
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(April 2011) Global food prices have been rising, threatening to reach record levels in the coming months if current trends continue. Growing world demand due to increasing world population and shifting consumption patterns, and lower supplies partly due to bad weather raised the World Bank’s food price index by 15 percent between October 2010 and January 2011.1 The index increased by 29 percent overall between February 2010 and February 2011. In January, the Food Price Index of the United Nations Food and Agriculture Organization (FAO) was at its highest level since tracking began in 1990.2 While not all countries are affected equally, the recent volatility is particularly alarming in regions where people spend more than half of their income on food.
GLOBAL FOOD PRICES SURGE TO RECORD LEVELS, HURTING THE POOR IN LOW- AND MIDDLE-INCOME COUNTRIES
A combination of unfavorable weather patterns around the world and uncertainty in the quality of wheat harvests in China has affected the global food supply. Record heat and drought in 2010 in the former Soviet Union sharply reduced wheat production and dealt a shock to global wheat supplies. Extreme dry weather in Brazil—a major food exporter—contributed greatly to worldwide deficits of sugar, soybeans, and maize. Devastating rain and floods in Australia damaged wheat crops and reduced the yields of sugar harvests. Additionally, a severe drought in China threatens the harvest of the country’s wheat crop and has prompted the FAO to issue a special alert, characterizing the current situation as “potentially a serious problem.”3 For decades, China has relied mostly on its own domestic grain production and was absent from the global grain market. However, if the drought destroys a significant portion of the harvest and China has to import grain to fulfill domestic demand, the impact can shock the world market and cause even sharper increases in global prices. As a result of China’s buying power, it can outbid others in the global market, and secure supplies for its own population. An expanding world population, greater reliance on crops as biofuels, and shifting diets continue to increase the collective demand for food, making the gap between supply and demand even wider. Since price volatility and growing demand are likely to persist, “we need global actio
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