World food prices stabilize, no drop in sight: WFP
KAMPALA (Reuters) - World food prices have stabilized but will not return to levels seen before 2008 when commodity prices skyrocketed pushing up inflation in many emerging markets, the U.N. food agency said on Friday.
While those prices have since eased on world markets, food prices in many developing nations continue to remain stubbornly high, and that situation has been exacerbated by a global economic slowdown that has hit exports and investment.
"The world food system has adjusted even though stocks are at a 20-year low ... the market refined its level to one that it can sustain," said World Food Program (WFP) Deputy Executive Director Sheila Sisulu.
"Our view is that they won't go back to the prices before 2008," she told Reuters in an interview.
Food prices rose to record levels last year, prompting riots and hoarding in some countries. The World Bank has warned the effects of the food crisis and the financial slowdown will exact a heavy toll on the poor and boost the number of hungry people.
Sisulu said prices for wheat, maize and rice -- which rose steeply last year -- had come down.
"All of them seem to be finding a level."
But she said African food costs were remaining high despite the drop in other markets.
"The prices in Africa ... have not gone down at the same rate as they have gone down globally," Sisulu said.
The global economy is projected to contract 1.4 percent this year due to the effects of the financial crisis, but growth should rebound in 2010 to 2.5 percent, according to the International Monetary Fund.
(Editing by Daniel Wallis)