Feast and famine as food prices soar

Today’s long-term rise in agricultural commodity prices is different from previous episodic spikes. Higher prices are having knock-on effects on companies in the sector, as well as on farmers and the poor, and causing a re-evaluation of business models. Peter Koh reports.

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TO UNDERSTAND THE impact of today’s higher food price environment it is important to understand how the factors behind the rally are different from those that drove previous price spikes.

“We’ve had falling real food prices for a whole century,” says Josef Schmidhuber, senior economist and head of the global perspectives studies unit at the UN’s Food and Agriculture Organization in Rome. “For decades, this reflected rapid productivity growth combined with declining population growth and a growing saturation of food demand.

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