World Bank warns on global food prices

World Bank warns on global food prices

The World Bank has warned that prices for raw materials such as barley and wheat will remain volatile for at least the next five years.

The Bank has reactivated its Global Food Crisis Response Program due to concerns about the effect of high raw materials costs on food prices in developing countries.

"We do expect high volatility in food prices to continue until at least 2015," said the World Bank's managing director, Ngozi Okonjo-Iweala, last week.

Its prediction highlights the threat of more disruption to food and drink companies' raw materials costs. Share prices in the world's major brewers fell in August after Russia, one of the world's biggest grain exporters, said that it would ban grain exports until at least the end of 2010 following a poor harvest.

World Bank president Robert Zoellick said that its concerns on food prices "have been compounded by recent increases in grain prices".

Heineken's chief financial officer, Rene Hooft Graafland, said today (27 October) that the brewer was not expecting a big increase in input costs in 2011. "It won't be a decline like we had this year, but not at the levels that we experienced in 2007 and 2008," he told analysts during the brewer's third quarter results conference call.