- Category: The Nation
- Published on Tuesday, February 08 2011 04:42
- Written by Rod Hughes
- Hits: 760
Last year rising food prices fueled 30% of the country's inflation and promises to be an even more imposing factor this year. Such is the conclusion of Gabriela Mayorga, writing in the financial newspaper El Financiero.
She bases part of her thesis on warnings by the United Nations Food and Agricultural Organization (FAO) and the International Monetary Fund to brace for higher costs at the grocery market.
From last August, food prices have been on an upward spiral, reaching record levels in December, writes Mayorga. She adds that alarms went off when basic grains hit the same levels as they did during the crisis of 2007-08.
Heeding these warnings, the Central Bank revised its target level of inflation from 4% to 5% with an acceptable tolerance of plus or minus 1%. Prices for products like wheat, corn, beans, cooking oil and petroleum are the greatest threats to family budgets.
In the past 12 months, prices for wheat rose $100 and corn by $88 and, with current unrest in the Middle East, the price of petroleum remains unstable.
But agricultural analyst Huge Chaverria with the InterAmerican Agricultural Cooperation Institute believes that current spikes in food prices is mostly a product of commodity speculators' activities.