What's New

Since the poor spend a greater share of their household incomes on purchasing food, higher food prices must exacerbate poverty, right? Wrong . . . at least over the medium term. In my most recent paper, I find that the opposite is true: higher domestic food prices predict reductions in poverty. The methods in this paper are fairly simple. I take World Bank national poverty estimates for a broad swathe of countries and regress changes in poverty against changes in domestic food prices (the ratio of the food CPI to the non-food CPI).

Food prices spiked in March, according to the latest FAO Food Price Index, released this week. The Index rose 4.8 points from February and is at its highest level since May 2013. The increase is due largely to poor weather and continuing unrest in the Black Sea region. Cereal and sugar prices gained the most this month.

The March edition of the FAO Monthly News Report on Grains was released this week. The report covers ongoing global and regional trends in grain prices and policies. This month's report includes articles on the International Grain Council's prediction that the global grain harvest will fall next season, India's food storage limitations, Russia's slowing grain crop growth, and the threat of an export bottleneck due to the ongoing crisis in the Ukraine.

Fertile soil is one of the basic building blocks of agricultural productivity. In order for crops to grow properly, soils need to contain the proper nutrients; unfortunately in many areas of the world, soils have become depleted of their nutrients, leading to decreased productivity.

Concerns have been growing over how the ongoing political turmoil in the Ukraine, the world's third largest maize exporter, could impact global grain prices and reserves in the coming year. While Ukraine has delivered the majority of its current export obligations, continuing conflict could pose problems for next season's planting and harvest, and thus future export shipments. According to an article published by IRIN News, however, experts do not foresee a long-term impact on global grain prices.