The dramatic surge in food prices in 2007–2008 seriously threatened the world’s poor, who struggle to buy food even under normal circumstances, and led to protests and riots in the developing world. The crisis eventually receded, providing some measure of relief for citizens in the countries that were most affected by the price surge; yet the FAO’s recent statement that global food prices reached a record high in December 2010 has raised the specter of another crisis.

How is a country affected by changes in the global prices of its export and import commodities?
What is the change in short-run prices when a country’s food supply is increased?

Answering such questions can pose a major challenge to global policymakers as they strive to respond to global and national food crises. It is essential that policymakers and researchers have access to the latest food security research and policy tools in order to strengthen national and global capacity to respond effectively to food policy challenges.

The FAO has released its Food Price Index for December, 2010. This report provides a measure of the monthly change in international prices for major food commodities. The December Price Index shows a marked increase in global food prices, with higher sugar, grain, and oilseed costs driving world food prices to a record high.

To view the whole report, visit http://www.fao.org/worldfoodsituation/FoodPricesIndex/en/.

Increasing food prices present both challenges and opportunities for the developing world. Just as the transmission of global prices to domestic prices can differ by country and commodity, the effects of changes in food prices within a country can differ from household to household. The welfare of urban and rural households may be affected differently, as will the welfare of net consumers compared to that of net producers.

Worldwide climatic events in 2010 made it clear that food security can be greatly impacted by unexpected changes in climate. Wildfires in Russia, floods in Pakistan and Australia, and drought in China led to increases in the price of staple agricultural commodities and caused widespread fear about the recurrence of a world food crisis. As the world's population continues to grow, a changing climate will present more and more challenges to sustainable agricultural growth and food security.

Sustainable agricultural growth and fair, stable global markets are key to maintaining global food security and reducing hunger and poverty, as well as to fulfilling the G20 commitment to worldwide economic growth and development. How to encourage growth and maintain stable markets, however, is a complex and widely debated issue. Reliable, objective research is needed to address the concerns of both the developed and the developing world and to ensure that domestic needs are not protected at the cost of global stability.

As food prices rose in 2010, the issue of food security was once again brought to the forefront of global attention. Wildfires in Russia, floods in Pakistan and Australia, and drought in China contributed to widespread concern about the cost and sustainability of the world’s food supply. With high and volatile food prices causing potential long-term problems for economic growth and poverty reduction, particularly in the developing world, the need for research-based policy responses is clear.

In the search for effective and sustainable policies to promote fertilizer use, numerous studies (especially those focused on developing regions) identify several supply-side and demand-side constraints at both the regional and country level that limit the development of input markets, and consequently fertilizer uptake.

The Famine Early Warning Systems Network (FEWS NET), funded by USAID, has released its latest monthly price watch detailing staple food prices for November 2010. These reports provide food security updates for 25 countries vulnerable to food insecurity, focusing on impacts on livelihoods and markets. These updates can help policymakers recognize and mitigate potential threats to food security.

Download the latest reports below. For more information regarding FEWS NET, please visit www.fews.net.

Global food prices have a range of effects, both positive and negative, on agricultural markets, food prices, and food security in the developing world. Having access to reliable food price information is critical for policymakers, food policy experts, and researchers to be able to respond quickly to dynamic developments in the global food system.