Falling oil prices and crop production boosts food security - CNBC Africa

Falling oil prices and crop production boosts food security

Special Report

by Trust Matsilele 0

Falling oil prices and record crop production to improve food security. PHOTOS: icid

The index considers the core issues of affordability, availability, and quality across 109 countries, and is the first to examine food security comprehensively across the three internationally-established dimensions.

The Economist Intelligence Unit (EIU) said that all-time high production levels of corn, wheat, soybeans, and falling global oil prices have resulted in improved food security outlooks for 79 of the 109 countries in the index.

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The unit also said the full impact of cheaper oil on local consumer prices, political stability and on the fiscal positions of oil exporters and importers will only play out in the months to come.

“Supplies and stocks of the major grains are very strong, which will push global prices lower in 2015," said Leo Abruzzese, global forecasting director for the Economist Intelligence Unit.

“The 60 per cent decline in the price of crude oil since July also is good news for food security. During the last 25 years, food and energy prices have tracked each other closely, so cheaper crude oil usually means more affordable food."

Commenting on the results of the 2015 Global Food Security Index (GFSI), Richard Okine, regional director of DuPont sub-Saharan Africa, said he was pleased with the latest result as he believes they reflect that progress is being made to, not only improve the lives of people in the region, but also grow the economy. 

“The trends continue to point towards an ongoing urbanisation and an increasing middle class. And, as this group continues to grow, there will be an increased demand for food in the region," he said.  

“In order to grow sub-Saharan Africa’s economy and tackle the growing population’s demands in the region, agriculture needs to be at the centre of the region’s developmental plan. For example, through the effective use of arable land – at the moment only 25 per cent of the land is being utilised effectively."

(READ MORE: Urgent action needed to ensure enough food for all)

The EIU expects prices for major food crops to continue falling in 2015. The average annual price for corn and soybeans are both expected to fall by 10-15 per cent this year from 2014.

It added that, world soybean production will reach an all-time high in 2014/15, and US production is set to dwarf the previous record by more than 16m tonnes.

“World corn output also is on track to break all previous records, as will the US crop. Wheat prices also will fall this year, but by a more modest seven per cent."

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