The ECB is concerned about rising food prices

In its monthly report published Thursday 20th January 2011, the European Central Bank (ECB) said it was concerned about rising prices for agricultural raw materials, which could cause inflation on foodstuffs in the European Union.

For the European Central Bank, four factors explain the recent inflation in wheat, maize, sugar and soybeans: climate hazards, protectionist threats, new pressure for demand in some emerging countries like China, and use of certain agricultural raw materials for the production of biofuels.

According to the ECB, inflationary pressure is expected to remain strong over the long term and this, due to strong global demand and the observed reduction in research funding over the past 20 years.

The financial institution responsible for monitoring price stability in the euro zone therefore recognizes that the large variations in agricultural commodity prices not only have adverse effects on food prices, but also ultimately on food security.

A strong signal, as the G20 has just formalized its regulation program and the other European institutions such as Parliament, have also recalled the strategic role that agriculture plays in food security research.