A commodities trader says rising food prices are a result of the growing world population and as countries become wealthier they will demand a more protein-based diet.
Bloomberg reports Singapore-based trader Sunny Verghese, chief executive officer at Olam International Ltd. (OLAM), said high wheat and soybean prices in 2011 and corn prices in 2012 are more the result of population growth and increased demand than a cyclical issue. Verghese made the statement at the Kingsman sugar conference in Dubai on Sunday.
The world’s population is expected to grow from its current 7 billion to 9 billion by 2050. The agriculture industry is aware of the challenge to feed an additional 2 billion people and is seeking technologies to boost their production to meet the demand.
Chris Mahoney, director of agricultural products at Baar, Switzerland- based trader Glencore International Plc, noted the world will also need to find solutions for transportation and storage of the commodities once they’re produced.
“Without the transport, logistics infrastructure and processing capacity, production even if it keeps pace with demand will be unable to reach the consumer,” Mahoney told Bloomberg.
Reuters reports Verghese made comments on the use of corn for energy. He said using food for fuel contributes to higher food prices, hitting the world’s poorest people hardest.
Keeping ample food supplies is a concern as people in many countries already spend over half of their income on food. High food costs have driven civil unrest in the Middle East and North Africa less than two years ago.