Next year will prove to be a very difficult one for the hungry. World food stocks have fallen to dangerously low levels. The UN estimates there will be 5.5% less wheat on the world market in 2013.
If the world experiences another shock, such as the droughts experienced in the US and Russia this year, 2013 could prove to be catastrophic for those who already struggle to feed themselves and their families.
The world’s poorest people spend between 50% and 90% of their income on food, compared with just 10%-15% in developed countries.
The drought has affected prices for corn and soybeans as well as other field crops which should, in turn, drive up retail food prices. However, the transmission of commodity price changes into retail prices typically takes several months to occur, and most of the impact of the drought is expected to be realized in 2013.