International food prices are spiking again for the second time in three years, igniting concerns about a repeat of the 2008 food price crisis and its consequences for the poor. In February 2011, the World Bank Food Price Index reached its 2008 peak, after rising by 47 percent since June 2010.
In addition to higher prices, the variability of international grain prices (around its mean) doubled during the period between 2005 and 2010 relative to the period between 1990 and 2005, sugar price variability tripled, and rice variability is four times higher. Price volatility is now back to similar levels experienced in the 1970s. Variability in prices is problematic when variations are large and unpredictable, as they pose fundamental food security risks for consumers and governments while discouraging needed investment in agriculture for development through increased financial risks for producers and traders1. They are occurring now in a period when expanding the supply of food is if anything more difficult than in the period following commodity price volatility in the 1970s.