Africa: World food prices are at their lowest level in years

World food prices are at their lowest level in years, but thanks to the exceptionally strong US dollar poor people in developing nations suffering severe climate shocks are seeing no benefit.

The FAO Food Price Index for 2015 was 19 points down on 2014, marking the fourth consecutive annual decline across a basket of commodities.

"Abundant supplies in the face of a timid world request and an appreciating US dollar are the major reasons for the general weakness that has dominated food prices in 2015," said the index, released last week.

The food price shocks of 2007 and 2011, which squeezed family budgets and drove the poor deeper into poverty, are over. The major producers responded to the high prices by boosting output, leading to the current surpluses.

But several developing nations currently need to import as a result of poor agricultural seasons, and "what you pay for in food imports is a function of the strength of your currency against the dollar and its purchasing power," noted FAO senior economist, Abdolreza Abbassian.

The US Dollar Index, which measures the dollar against major currencies, was up by around 10 % at the end of 2015. "So far this year the dollar has gained against currencies of all description - developed market, emerging market, commodity currencies," the Financial Times wrote yesterday.

For southern Africa - and particularly South Africa - the situation is particularly grim.

South Africa is the maize basket for the region, but last year an El Niño-induced drought dropped output by 30 %. It's feared that additional late rains again at the end of 2015 could see production fall by as much as 50 %, at a time at the same time as the rand is trading at record lows against the dollar.

"It's a very alarming situation in southern Africa," said Abbassian.

Across the region maize reserves are dangerously low, and 30 million people are regarded as "food insecure" - meaning they lack access to enough food to lead healthy lives. While South Africa as an economic leader can manage the crisis, other additional vulnerable nations will need food aid to get by.

The poor regional harvest and the dry conditions at the start of the 2016 crop season mean local food prices have continued to climb - doubling in some cases, according to FAO's new monthly Food Price Monitoring and Analysis bulletin.

The fact that there are world food surpluses and from presently on people are still going hungry means the problem "is about access to food" rather than availability, said Abbassian. The world's ability to grow additional food is not the solution to hunger, but its affordability in local markets.