Food Price Watch YEAR 4 • ISSUE 16 • FEBRUARY 2014 88390 Prices of internationally traded food commodities continued to decline—by 3%—between October 2013 and January 2014, adding another quarter to previously observed price declines since the August 2012 historical high. Record harvests in wheat, maize and rice, increasing availability of supplies, and stronger global stocks have continued to drive down prices. Yet, international prices are still not overly far from their historical peak. Upward pressures from weather concerns and increasing demand, and downward risks from the effects on export prices of an increasingly contested Thai rice procurement program continue to require close monitoring. Domestic food prices show their typical large variations across countries, with stable prices among a number of regions and mixed trends in East and South Asia as a result of seasonal factors, procurement policies, and localized production shortfalls. This issue of the Food Price Watch explores food losses and food waste across the globe. Astonishing figures indicate that the world loses or wastes about one-quarter to one-third of the food it produces for consumption. In Africa and South Asia, regions severely affected by undernourishment, this loss represents 400–500 kcal per person per day. In addition to their impact on food insecurity, food loss and waste cause huge economic, energy, and natural resource inefficiencies and have poverty implications. Potential solutions to prevent food loss and waste include changing agricultural production techniques; making large investments in transport and storage infrastructure; and changing consumer and commercial behavior. Global Price Trends Figure 1. World Bank Global Food Price Index International prices of food continued to decline between 180 October 2013 and January 2014 (figure 1). The World 160 Bank’s Food Price Index decreased an additional 3% during 140 that period. Declines have been sustained month after 120 month in line with already favorable and improving supply 100 prospects. Nonetheless, the size of the recent decline in 80 internationally traded food prices is half of that observed 60 between June and October of 2013. The Bank’s Food Price 40 20 food grains Index in January 2014 was 11% lower than a year ago, and fats and oils other food 0 18% below the all-time peak in August 2012 (table 1). 2000M01 2001M03 2002M05 2003M07 2004M09 2005M11 2007M01 2008M03 2009M05 2010M07 2011M09 2012M11 2014M01 Hence, despite steady declines, prices of internationally traded food remain not overly far from their historical peak.1 Source: World Bank, DECPG. Declines in the prices of internationally traded grains Note: The Food Price Index weighs export prices of a variety of food commodities around the world in nominal U.S. dollar prices, 2010 = 100. Note that the previous base, 2005 = 100, has now been and in the “other” category—mostly sugar—have driven the changed to 2010. overall decrease in food prices between October 2013 and January 2014. The prices of grains and other foods were Food Price Watch, produced by the Poverty Reduction and Equity Department at the World Bank, is a series that aims at drawing attention to trends in domestic food prices in low- and middle-income countries and their policy implications. Contact: José Cuesta (jcuesta@worldbank.org) Table 1. Price Change of Key Food Commodities experienced marked decreases (16%), Oct. 2013– Jan. 2013– Aug. 2012– while those of soybean oil declined Indices Jan. 2014 (%) Jan. 2014 (%) Jan. 2014 (%) more moderately (by 4%).4 Food -3 -11 -18 Favorable conditions have Grains -5 -27 -31 confirmed previous projections of Fats and oils 0 -2 -16 record grain harvests, resulting in further—but lower—price declines Other -5 -4 -6 between October 2013 and January Fertilizer 4 -21 -24 2014. In the case of wheat, overall Prices conditions have been favorable both Maize -2 -35 -40 across northern and southern Rice (Thai, 5%) 3 -20 -21 hemispheres, leading to record high Wheat (U.S., HRW) -15 -18 -21 production forecasts for 2013–14. Sugar (world) -16 -17 -25 Although at different stages of their Soybean oil -4 -21 -25 seasons, the major producers in the Black Sea, United States, European Crude oil, average -3 -3 -3 Union, Canada, China, and India all Source: World Bank, DECPG. report favorable crop conditions.5 both 5% lower in January 2014 than in October 2013. Among major southern hemisphere producers, including Prices of fats and oils remained unchanged during the Australia, Argentina and South Africa, prospects are same period. typically favorable, but recent concerns, based on heat and dryness conditions, have not fully dissipated regarding International grains prices have followed mixed trends prospects for Argentina and Australia.6 The decreasing use during the last quarter. International wheat prices of wheat for feeding purposes—substituted by cheaper decreased by 15% between October 2013 and January maize and other coarse grains—has eased pressure on its 2014. This price decline is the largest among grains and international prices.7 In contrast, increasing import reverses previous increases—especially a sharp rise in demand in North Africa, Middle East and Japan, and October 2013—associated with past weather uncertainties. increased procurement prices in India, have increased The price of internationally traded maize fell by only 2% pressure on export prices.8 between October 2013 and January 2014. Yet, sustained monthly reductions during those three months extended The anticipated record maize harvest in the world’s top to nine the consecutive months of price declines. In producer and exporter, the United States (after last year’s January 2014, maize prices were 35% lower than a year sharp decline); significant output increases for EU and ago, but most of that reduction took place between June Black Sea producers; and improved harvests in China9 and October 2013, as reported by the November 2013 continue to exert downward pressures on international Food Price Watch.2 Rice prices, based on origin and quality, maize prices. Further price decreases may be tempered by followed different patterns between last October and increasing demand for feeding purposes, especially in January 2014. Prices of Thai 5% rice increased by 3%, China and the United States.10 The use of maize to produce while Vietnamese rice prices—not reported here—increased ethanol in the United States is increasing, reflecting strong by 11%. In contrast, export prices of Indian rice and lower ethanol production and increases in gasoline projections in quality Thai rice declined during this same period as a that country.11 Nevertheless, recent downward adjustments result of large available supplies, even though public for maize output are reported for Argentina, the Russian procurement programs partially limited such declines. Federation and European Union, with weather-related Regarding commodities other than grains, the Bank’s stresses also reported in Brazil and South Africa, and average price of crude oil was US$104 per barrel during increases in procurement prices reported in China.12 the quarter ending January 2014, and was, in January In the case of rice, bumper crop expectations have been 2014, some 3% below its October 2013 average. Fertilizer revised further upward on account of improved yields and prices increased by 4% during this period, against a increases in harvested area in United States, Brazil, and backdrop of sharp annual declines.3 Sugar prices Pakistan; bumper crops among large Asian producers, such POVERTY REDUCTION & EQUITY DEPARTMENT • WWW.WORLDBANK.ORG/POVERTY POVERTY REDUCTION AND ECONOMIC MANAGEMENT (PREM) NETWORK THE WORLD BANK GROUP 2 as Thailand and India; and improved prospects for domestic prices of rice have decreased among major Indonesia.13 These production records, the ample public exporting countries due to recent bumper crops; have reserves in India, and the efforts of the Thai government to increased elsewhere from unfavorable weather conditions; release massive stockpiles are exerting downward pressures and, in the case of wheat, have remained stable at high levels on export prices. Yet, prices of certain varieties and origins from limited supplies. In Central Asia, prices of wheat also have recently increased, the result of the increasingly remained stable at high levels as a result of high oil and contested paddy mortgage program in Thailand;14 transportation costs, despite recent good harvests and increased demand for Vietnamese rice in the aftermath of lowered export prices in the region.23 the Haiyan Typhoon in the Philippines;15 and disappointing Between October 2013 and January 2014, the largest output in China, which expects a reduced crop for the first wheat price increases (table 2) took place across monitored time in 10 years.16 markets in Sudan (30%), due to increasing demand and Going forward, pressures are anticipated to weaken in currency depreciation, and in Uruguay (20%), Ukraine the short term. The latest World Bank Commodity Markets (13%), and Russia (11%), national averages, due to strong Outlook17 talks of “normal trends” in terms of crop regional export demand.24 Sizable wheat price reductions, conditions, which favorably add to well-supplied markets mostly because of the availability of recent harvests, were and strong cereal global stocks.18 Further decreasing observed in monitored markets in Argentina (59%), fertilizer prices, unforeseen dramatic changes in the Ethiopia (21%), Moldova (20%), Brazil (13%, national production of biofuels, and the continuation of sensible average), and Tajikistan (6%, national average).25 Domestic trade policies (as those seen during the latest price hike in maize prices experienced the largest increases, between 47 2012) all point to a favorable outlook. Nonetheless, and 41%, registered in monitored markets in South Africa, deteriorating weather concerns among major producers Malawi, and Mozambique on account of tighter supplies, and exporters, especially those in Argentina, Australia, and increasing fuel prices, and depreciating currencies.26 Large parts of China;19 higher oil prices; and the effects of an increases were also observed in monitored markets in increasingly anticipated release of public stockpiles in Bolivia (27%), Tanzania (26%), Ecuador (21%), and Thailand on export rice prices all constitute risks to Zambia (17%, national average) because of reduced monitor in the short term. national supplies.27 Domestic maize prices declined in monitored markets in Ethiopia (41%), as the main— bumper—crop arrived to markets, Moldova (30%), Togo Domestic Price Trends (29%), and Honduras (16%). Between October 2013 and Domestic prices of grains have remained mostly stable, with January 2014, rice prices increased by 18% in monitored some regions reporting mixed trends. In western Africa, markets in Somalia, partially reflecting depreciation of the cereal prices have remained stable or have decreased in local currency,28 and 10, 9, and 9% in markets in Peru, recent months, after increasing supplies from coastal Malawi, and Sri Lanka, respectively.29 The largest declines countries (notably Nigeria) more than offset limited in rice prices occurred in the capital cities of Mauritania production in the Sahel.20 In southern Africa, the price of (16%, from a strong increase in domestic production30) maize remained high or increased across the region, while and the Republic of the Union of Myanmar (13%) and soaring to record levels in South Africa on seasonal tighter Cambodia (11%), mainly reflecting new supplies and supplies, increasing demand, currency depreciations, and favorable prospects. concerns about upcoming harvests.21 In eastern Africa, Domestic price variations between January 2013 and maize prices have followed seasonal trends, decreasing lately January 2014 show the usual wide range in yearly prices. from ongoing harvests, but remaining at high levels. In The price of wheat in January 2014 was 168% higher than Central America, prices of maize remained stable or 12 months ago in Argentina (Buenos Aires), because of decreased—from abundant supplies and favorable tight supplies and uncertain prospects; 92% higher in prospects—with mixed trends for the price of beans.22 In Sudan (Dongola), resulting from currency depreciation South America, wheat prices remained high even after and low imports from foreign currency shortages; 54% recent declines from completed harvests, while maize prices higher in Belarus; and 50% higher in Ethiopia (Debre remained low and stable from ample supplies. In East and Marcos) and 39% higher in Bolivia (La Paz), reflecting South Asia, prices of staples have followed mixed trends: reduced production and imports, respectively. Russia POVERTY REDUCTION & EQUITY DEPARTMENT • WWW.WORLDBANK.ORG/POVERTY POVERTY REDUCTION AND ECONOMIC MANAGEMENT (PREM) NETWORK THE WORLD BANK GROUP 3 Table 2. Largest Variations in Domestic Prices Quarterly Price Movements: October 2013 – January 2014 % % Wheat change Maize change Sudan, Dongola, wholesale, Sudanese pound/local 30 South Africa, Randfontein, yellow, wholesale, rand/ton 47 Uruguay, natl. avg., flour, wholesale, Uruguayan peso/kg 20 Malawi, Lizulu, retail, kwacha/kg 45 Belarus, natl. avg., flour, retail, Belarussian ruble/kg 15 Mozambique, Milange, white, retail, metical/kg 41 Ukraine, natl. avg., 3rd class, bid, EXW, processing, hryvnia/ 13 Bolivia, Cochabamba, hard yellow, cubano, wholesale, boliviano/ 27 ton local Russian Federation, natl. avg., EXW, wholesale, ruble/kg 11 Tanzania, Arusha, wholesale, US$/ton 24 Tajikistan, natl. avg., flour, 1st grade, retail, somoni/kg -6 Ecuador, Quito, yellow, wholesale, US$/kg 21 Brazil, natl. avg., wholesale, Brazilian real/kg -13 Zambia, natl. avg., white, retail, kwacha/local 17 Moldova, Chisinau, retail, Moldovan leu/kg -20 Honduras, Tegucigalpa, white, wholesale, US$/kg -16 Ethiopia, Jimma, white, wholesale, Ethiopian birr/local -21 Togo, Korbongou, white, retail, CFA franc/kg -29 Argentina, Buenos Aires, wholesale, US$/kg -59 Moldova, Chisinau, retail, Moldovan leu/kg -30 Ethiopia, Addis Ababa, wholesale, US$/kg -41 % % Rice change Sorghum change Somalia, Mogadishu, imported, retail, Somali shilling/kg 18 Somalia, Hargeisa, red, retail, Somali shilling/kg 29 Peru, Lima, milled, corriente, wholesale, nuevo sol/kg 10 Sudan, Dongola, feterita, wholesale, Sudanese pound/local 17 Malawi, Lilongwe, retail, kwacha/kg 9 Togo, Korbongou, retail, CFA franc/kg 14 Sri Lanka, Colombo, white, retail, Sri Lanka rupee/kg 9 Mali, Ségou, local, wholesale, CFA franc/local -9 Mozambique, Nampula, retail, metical/kg 7 El Salvador, San Salvador, Maicillo, wholesale, US$/local -15 Bangladesh, Dhaka, coarse, wholesale, taka/kg 6 Niger, Maradi, local, wholesale, CFA franc/local -25 India, Patna, retail, Indian rupee/kg -9 Chad, Abeche, retail, CFA franc/kg -32 Togo, Amegnran, imported, retail, CFA franc/kg -9 Ethiopia, Addis Ababa, red, wholesale, US$/kg -35 Cambodia, Phnom Penh, mix, wholesale, riel/kg -11 Myanmar, Rep. of the Union of, Yangon, Emata, -13 Manawthukha FQ, wholesale, kyat/kg Mauritania, Nouakchott, imported, retail, ouguiya/kg -16 Annual Price Movements: January 2013 – January 2014 % % Wheat change Maize change Argentina, Buenos Aires, flour, wholesale, US$/kg 168 Malawi, Lilongwe, retail, kwacha/kg 89 Sudan, Dongola, wholesale, Sudanese pound/local 92 Bolivia, La Paz, hard yellow, cubano, wholesale, boliviano/local 54 Belarus, natl. avg., flour, retail, Belarussian ruble/kg 54 South Africa, Randfontein, white, wholesale, rand/ton 47 Ethiopia, Debre Marcos, white, wholesale, Ethiopian birr/local 50 Somalia, Hargeisa, white, retail, Somali shilling/kg 36 Bolivia, La Paz, flour, imported, Argentina, wholesale, 39 Zambia, natl. avg., white, retail, kwacha/local 28 boliviano/local Afghanistan, Kabul, flour, retail, afghani/kg -16 Tanzania, Dar es Salaam, wholesale, US$/ton -22 Ukraine, natl. avg., 3rd class, bid, EXW, processing, hryvnia/ton -19 Togo, Cinkassé, white, retail, CFA franc/kg -25 Moldova, Chisinau, retail, Moldovan leu/kg -26 Haiti, Port-au-Prince, meal, local, retail, gourde/local -33 Russian Federation, natl. avg., EXW, wholesale, ruble/kg -30 Moldova, Chisinau, retail, Moldovan leu/kg -34 Russian Federation, natl. avg., offer EXW, wholesale, ruble/kg -38 Ukraine, natl. avg., bid, EXW, processing, wholesale hryvnia/ton -38 table continues on next page POVERTY REDUCTION & EQUITY DEPARTMENT • WWW.WORLDBANK.ORG/POVERTY POVERTY REDUCTION AND ECONOMIC MANAGEMENT (PREM) NETWORK THE WORLD BANK GROUP 4 Annual Price Movements: January 2013 – January 2014 (continued) % % Rice change Sorghum change Bolivia, La Paz, grano de oro, wholesale, boliviano/local 41 Somalia, Baidoa, red, retail, Somali shilling/kg 75 Bangladesh, Dhaka, coarse, wholesale, taka/kg 28 Ethiopia, Addis Ababa, white, wholesale, US$/kg 65 Peru, Lima, milled, corriente, wholesale, nuevo sol/kg 20 Sudan, Al-Fashir, feterita, wholesale, Sudanese pound/local 52 Malawi, Lilongwe, retail, kwacha/kg 18 Chad, Moundou, retail, CFA franc/kg 25 Somalia, Buale, imported, retail, Somali shilling/kg -12 Niger, Agadez, local, wholesale, CFA franc/local 17 Colombia, natl. avg., 1st quality, retail, Colombian peso/kg -13 Mali, Kayes, local, wholesale, CFA franc/local 10 Mali, Sikasso, local, wholesale, CFA franc/local -20 Burkina Faso, Ouagadougou, local, wholesale, CFA franc/local 7 Rwanda, Kigali, wholesale, US$/ton -22 El Salvador, San Salvador, Maicillo, wholesale, US$/local -5 Thailand, Bangkok, 25% broken, wholesale, baht/ton -27 Togo, Cinkassé, retail, CFA franc/kg -31 Source: Food and Agriculture Organization (FAO), and Global Information and Early Warning System (GIEWS). Note: Currencies as originally reported by FAO. (30%, national average), Moldova (Chisnau, 26%), Ukraine after the repeated food price hikes post-2008 and increasing (national average, 19%), and Afghanistan (Kabul, 16%) demand from a growing population,39 food loss and food report more moderate decreases in domestic wheat prices, waste are increasingly attracting global attention. Global mainly due to bumper crops.31 Large increases in the attention and concern are fully justified by these staggering annual maize price occurred in monitored markets in figures: Malawi (Liwonde, 89%) due to the devaluation of its • Between one-fourth and one-third of the nearly 4 currency and localized production declines;32 Bolivia (La billion metric tons of food produced annually for hu- Paz, 54%), reflecting poor production last year; and in man consumption is lost or wasted.40 South Africa (Randfontein, 47%) and Somalia (Hargeisa, • Cereals represent more than half of all food lost or 36%), partially reflecting market disruptions from civil wasted, 53%, by calorie content. By weight, fruits insecurity. Maize prices declined over the last year in and vegetables represent, at 44%, the largest share of Ukraine and Russia (national average, 38%), and in the global food loss and food waste.41 capital cities of Moldova (34%), Haiti (33%) and Tanzania • Most losses and waste take place at the consumption (22%), generally due to bumper crops in 2013.33 Rice (35%), production (24%), and handling and storage prices increased in monitored domestic markets in Bolivia (24%) stages of the food value chain. (41%), Bangladesh (28%), Peru (20%), and Malawi (18%).34 • Yet there are marked differences between devel- In contrast, the annual rice price dropped more than 20% oped and developing countries and across regions. in Thailand, Rwanda, and Mali.35 Overall, some 56% of total food loss and food waste occurs in the developed world; the remaining 44% Food Loss and Food Waste across developing regions. Figure 2 presents regional Food loss and food waste refer to edible parts of plants and breakdowns. animals intended for human consumption that are not This astonishing volume of food loss and waste ultimately consumed by people.36 Food loss typically occurs constitutes a serious food insecurity concern, because it at the production, storage, processing, distribution, and reduces the availability of food for human consumption. marketing stages of the food value chain. It is the unintended According to Food and Agricultural Organization (FAO) result of technical limitations or poor infrastructure,37 data,42 per capita food losses in the developed world average widely agreed to mostly happen in developing countries.38 In a whopping 250–300 kg per year, of which 75–115 kg are developed countries, food waste typically takes place at the the result of consumers’ waste. This total food waste in the retail and consumption stages of the food value chain, the developed world amounts to 750–1,500 kcal per person result of a conscious decision to throw food away. Until the per day!43 In turn, the developing world loses 120–220 kg recent onset of cheap food, many considered the deliberate of food per person per year, which means that even regions decision to waste food an “embarrassment of riches”; but ridden by undernutrition, such as South Asia and Sub- POVERTY REDUCTION & EQUITY DEPARTMENT • WWW.WORLDBANK.ORG/POVERTY POVERTY REDUCTION AND ECONOMIC MANAGEMENT (PREM) NETWORK THE WORLD BANK GROUP 5 Figure 2. Global Food Loss and Waste by Region a. Percent of total loss 6% 7% 28% Industrialized Asia 9% South and Southeast Asia North America and Oceania Europe 14% Sub-Saharan Africa North Africa, West and Central Asia Latin America 23% 14% Source: Brian Lipinski, Craig Hanson, Richard Waite, et al., “Reducing Food Loss and Waste,” World Resources Institute Working Paper, June 2013; Jenny Gustavsson, Christel Cederberg, Ulf Sonesson, et al., “Global Food Losses and Food Waste—Extent, Causes and Prevention,” FAO, Rome (2011). Note: Share of global food loss and waste, 2009 (100% = 1.5 quadrillion kcal). b. By food chain stage production distribution and market 120 processing consumption handling and storage 100 5 61 46 52 34 28 13 13 80 15 7 4 17 60 37 18 6 37 11 9 4 40 2 22 7 5 21 9 23 12 20 6 32 39 28 17 17 23 23 0 North America Industrialized Europe North Africa, Latin South and Sub-Saharan and Oceania Asia West and Central America Southeast Asia Africa Asia 42 25 22 19 15 17 23 Share of total food available that is lost or wasted (%) Source: Lipinski, et al., “Reducing Food Loss and Waste”; Gustavsson et al., “Global Food Losses and Food Waste.” figure continued on next page Note: Percent of total kcal lost and wasted, 2009. Numbers may not total 100 due to rounding. Saharan Africa, lose as many as 400–500 kcal per person the incomes of (typically small) farmers, while requiring per day, every day. (poor) consumers to increase their spending to satisfy In addition to the food security dimension, food loss minimum calorie intakes. For example, 1 calorie of food and waste also have grave economic, environmental, natural requires, on average, 7–10 calories of inputs to be resource, and poverty implications. Food losses represent produced.44 Similarly, producing 1 ton of apples requires, squandered investment in agriculture; cause unnecessary on average, 822 m3 of water; a ton of rice (paddy) requires greenhouse gas emissions; generate enormous inefficiencies 1,673 m3 of water; soybean oil (refined) needs 4,190m3 of in the use of water, energy, fertilizers, and land; and reduce water; and coffee (roasted) needs 18,925m3.45 POVERTY REDUCTION & EQUITY DEPARTMENT • WWW.WORLDBANK.ORG/POVERTY POVERTY REDUCTION AND ECONOMIC MANAGEMENT (PREM) NETWORK THE WORLD BANK GROUP 6 Figure 2. Global Food Loss and Waste by Region (continued) c. In annual per capita kilograms 300 production to retailing consumer per capita food waste (kg/yr) 250 115 95 25 200 73 33 6 150 11 100 181 186 163 198 183 161 114 50 0 North America Europe Industrialized Latin North Africa, Sub-Saharan South and and Oceania Asia America West and Africa Southeast Asia 2,000 Central Asia Source: Lipinski, et al., “Reducing Food Loss and Waste”; Gustavsson et al., “Global Food Losses and Food Waste.” d. In daily per capita kilocalories 1,500 1,520 kcal per capita per day 1,000 748 746 500 594 545 453 414 0 North America Europe Industrialized North Africa, Sub-Saharan Latin South and and Oceania Asia West and Central Africa America Southeast Asia Asia Source: Lipinski, et al., “Reducing Food Loss and Waste”; Gustavsson et al., “Global Food Losses and Food Waste.” Note: Developed regions include North America and Oceania; Europe; and industrialized Asia (China, Japan, and the Republic of Korea); the rest are considered developing regions. At the household level, in countries like the United Despite a global problem, the causes of food loss and States and the United Kingdom, an average family of four waste are context specific and multiple. The primary causes wastes US$1,600 and US$1,100 per year at the of food loss include inadequate agricultural practice consumption stage, and evidence points to such losses as knowledge, transport infrastructure and logistic systems, having increased over time.46 By socioeconomic status, and poorly engineered storage facilities. Food waste is recent evidence for Turkey, South Africa, and Australia47 closely related to commercial practices and cultural factors. finds that lower-income groups waste less food than higher For example, in developed countries, large supermarkets’ income groups in terms of weight, calories, and spending purchasing policies may incentivize overproduction.50 In (table 3).48 This evidence supports analyses reporting that addition, promotional offers and high-pressure advertising higher-income households produce more solid waste (food campaigns may encourage overpurchasing behaviors and others) than poorer households.49 among consumers, which lead to food waste at home. POVERTY REDUCTION & EQUITY DEPARTMENT • WWW.WORLDBANK.ORG/POVERTY POVERTY REDUCTION AND ECONOMIC MANAGEMENT (PREM) NETWORK THE WORLD BANK GROUP 7 Table 3. Food Waste by Socioeconomic Group, mobilization.56 After all, future progress in agricultural Selected Countries production and climate change will mean very little for Lower- Middle- Higher- global food security if we keep losing and wasting a third of income income income Country group group group the food meant to be consumed. Turkey, 2005: Total food waste per household in terms of grams per person 274 285 319 Notes per day 1. The international trade price of maize is a notable exception, it South Africa, 2011: Total remained some 40% lower in January 2014 than the level registered food waste by household in 410 740 1,290 in August 2012, the historical peak (table 1). grams per person per day 2. The plunge in internationally traded maize between June and Australia, 2009: Total food October 2013 responds to anticipated record harvests in the United waste by household per 518 635 803 year in dollars States and strong recoveries among producers in the Black Sea and Source: Turkey: G. Pekcan, E. Koksal, O. Kucukerdonmez, and H. Ozel, “Household Food China on the one hand, and overall weak demand on the other, Wastage in Turkey,” Working Paper ESS/ESA No. 6e, FAO, Rome (2006); South Africa: A. leading to easing markets and a buildup in inventories (World Bank, Nahman, W. de Lange, S. Oelofse, and L.Godfrey, “The Costs of Household Food Waste in South Food Price Watch, November 2013). Africa,” Waste Management 32, 2147–53 (2012); Australia: D. Baker, J. Fear, and R. Denniss, “What a Waste: An Analysis of Household Expenditure on Food,” Policy Brief No. 6, Australia 3. Increases during the last two months in the prices of natural gas, a Institute (2009). critical production cost for fertilizers, explain the recent increase in the fertilizer prices (World Bank, Global Economic Prospects: Commodity Markets Outlook, January 2014). Consumers’ poor understanding of complex and 4. Substantial price declines in internationally traded sugar are conservative “use by” labeling may encourage food waste explained by surplus production exceeding expectations in Brazil— home. Wherever food is culturally regarded as a cheap and the world’s largest producer and exporter—along with favorable abundant item, it is more likely to become “grossly conditions among other northern hemisphere producers such as undervalued” and readily thrown away.51 India, Mexico, and Thailand (World Bank, Global Economic Prospects: Commodity Markets Outlook, January 2014). In the case of soybeans, Effective solutions to reduce food loss and waste clearly increased production expected in the United States and Brazil is require multiple interventions. Even though it may not be partly counteracted by a tight U.S. market and weather concerns in realistic to expect zero food loss and waste, there are simple, the southern cone of Latin America, specifically Argentina (United States Department of Agriculture [USDA], World Agricultural promising, and cost-effective engineering solutions— Supply and Demand Estimates [WASDE], No. 525, January 10, specific to context and available technologies—already 2014; USDA, WASDE, No. 526, February 10, 2014; World Bank, exist.52 These include evaporative coolers, already in use in Global Economic Prospects. Tanzania and India; hermetically sealed plastic storage bags 5. FAO, Cereal Supply and Demand Brief, December 5, 2013; USDA, for crops, such as cowpeas in Nigeria; small metal silos that WASDE, No. 526; Agricultural Market Information Systems (AMIS), Market Monitor, No. 14, December 2013. have been tested in Kenya; or the use of plastic crates— 6. USDA, World Agricultural Weather Highlights, February 10, 2014, instead of bags—for harvesting tomatoes, such as in and January 10, 2014; AMIS, Market Monitor, No. 14. Afghanistan.53 On a larger scale, developing countries need 7. AMIS, Market Monitor, No. 15, February 2014. to improve and expand infrastructure related to roads, 8. USDA, WASDE, No. 525. In India, the government has increased railways, electricity generation, potable water supplies, the price paid for wheat by 4% under the minimum price support heating, ventilation, and storage facilities.54 Particularly program (AMIS, Market Monitor, No. 14). In addition, it has reduced the floor price for wheat exports by 13% on October 30, 2013 (FAO, pertinent in developed countries are the purposeful efforts Global Food Price Monitor, February 10, 2014; AMIS, Market of the Waste & Resources Action Programme (WRAP) in Monitor, No. 14). the United Kingdom; Food Use for Social Innovation by 9. Improved output in China is anticipated because of better than Optimising Waste Prevention Strategies (FUSIONS) in the expected weather and an increase in harvested area (USDA, WASDE, European Union; and the Food Waste Reduction Alliance No. 525). (FWRA)55 in the United States. These initiatives are 10. FAO, Cereal Supply and Demand Brief. striving for more efficient waste management, for food and 11. USDA, WASDE, No. 525. 12. In Brazil, increasing export interest and public support measures other resources; increased food donations; and changes in add to weather concerns (USDA, WASDE, Nos. 525 and 526). the behaviors, perceptions, and preferences of consumers 13. FAO, Crop Prospects and Food Situation, No. 4, December 2013. and retailers. Internationally, more coordinated efforts are 14. Problems with the Thai program include delayed payments to advocating raising awareness; setting targets; facilitating farmers, allegations of corruption, and a caretaker government the transfer of knowledge and technologies; and resource currently in office. For more information, see, for instance, The Wall POVERTY REDUCTION & EQUITY DEPARTMENT • WWW.WORLDBANK.ORG/POVERTY POVERTY REDUCTION AND ECONOMIC MANAGEMENT (PREM) NETWORK THE WORLD BANK GROUP 8 Street Journal (“Thai Farmers Begin Deserting Government Over Late 35. Prices went down due to increased imports and an improved security Rice Payments,” January 18, 2014) or Thomson Reuters Eikon (“Rice situation in Mali; public stock releases and decreased export prices in debacle Could Spell End of Thai government,” February 7, 2014). Thailand; and because of increasing supplies in Rwanda (FAO, 15. Because harvests mostly were complete in affected areas, the typhoon Global Food Price Monitor, February 10, 2014; FEWS NET, Price did not cause huge production losses. Watch, January 31, 2014). 16. AMIS, Market Monitor, No. 15. This decline is attributed to belated 36. Brian Lipinski, Craig Hanson, Richard Waite, et al., “Reducing Food rains affecting intermediate crops (dry conditions that have, Loss and Waste,” World Resources Institute Working Paper, June incidentally, also affected important producing areas in northeastern 2013; Jenny Gustavsson, Christel Cederberg, Ulf Sonesson, et al., states in India; see also FAO, Crop Prospects and Food Situation). “Global Food Losses and Food Waste—Extent, Causes and 17. FAO and the Organisation for Economic Co-operation and Prevention,” FAO, Rome (2011). Development (OECD) share a similar favorable price outlook also 37. Ibid. extended into the long term (OECD and FAO, Agricultural Outlook 38. Ibid. 2013–2022, Paris: OECD [2013], http://www.oecd.org/site/oecd- 39. In addition, there are other factors such as large international dietary faoagriculturaloutlook/). shifts and urbanization processes that, among other things, imply 18. In the case of maize, global stocks are expected to reach record high less people willing to work in agriculture (J. Parfitt, M. Barthel, and volumes. For all three major grains, global stocks-to-use ratios (major S. Macnaughton, “Food Waste within Food Supply Chains: exporter stock-to-disappearance ratios) remain comfortable: 24.9% Quantification and Potential for Change to 2050,” Philosophical (16.1%) for wheat; 17.6% (13%) for coarse grains; and 35.9% (28.1%) Transactions of the Royal Society Biological Sciences 365, 3065–81 for rice (USDA, WASDE, several issues; FAO, Cereal Supply and [2010]). Demand Brief, several issues). 40. Specifically, 24% when measured through calories, 32% when 19. USDA, World Agricultural Weather Highlights, February 10, 2014. measured by weight (Lipinski et al., “Reducing Food Loss,” based on 20. FAO, Global Food Price Monitor, February 10, 2014. Gustavsson et al., “Global Food Losses”). The Institution of 21. FAO, Global Food Price Monitor, February 10, 2014; FEWS NET, Mechanical Engineers (IME, “Global Food: Waste Not, Want Not,” Price Watch, January 31, 2014. London [2013]) raise this share to half. 22. FAO, Global Food Price Monitor, February 10, 2014. 41. By food commodity, roots and tubers are the most lost and/or wasted: 63% of production, based on calories. For fruits and 23. FAO, Global Food Price Monitor, December 10, 2013, and November vegetables, the lost or wasted share reaches 42%; for cereals, 26%; and 11, 2013. for meat, 19% (Lipinski et al., “Reducing Food Loss”; Gustavsson et 24. Ibid. al., “Global Food Losses”). 25. In Moldova and Tajikistan, domestic price declines are the result of 42. Gustavsson et al., “Global Food Losses.” lower export prices of a key regional exporter, Kazakhstan, and a 43. The reported kcal per person per day numbers refer to the total food recent decline in fuel prices in Tajikistan (FAO, Global Food Price waste in developed countries, not to the food waste incurred by Monitor, February 10, 2014). consumers. 26. South Africa and Malawi currencies depreciated during this period. 44. This average hides large differences across foodstuffs. For example, Ibid. 36 calories of input are needed for 1 of beef (IME, “Global Food”). 27. Reduced imports, in the case of Ecuador. 45. See Lipinski et al., “Reducing Food Loss.” Other illustrations of 28. FAO and Global Information and Early Warning System (GIEWS), inefficiencies include postharvest losses, which have been estimated “Country Brief: Somalia,” January 28, 2014. to be up to US$4 billion per year in Sub-Saharan Africa. In China, 29. These price increases are partially the result of limited production, as consumers’ food waste is worth US$32 billion a year, not far from in Sri Lanka, more expensive imports, as in Somalia, and increasing the reported US$48 billion in the United States (W. Zhou, “Food costs from currency depreciation and higher fuel prices, as in Malawi Waste and Recycling in China: A Growing Trend?” http://blogs. (FAO and GIEWS, “Country Brief: Somalia,” January 28, 2014). worldwatch.org/nourishingtheplanet/food-waste-and-recycling-in- 30. GIEWS, “Country Brief: Mauritania,” January 28, 2014. china-a-growing-trend/). One hundred seventy-three billion cubic meters of water, 198 million hectares of land, and 28 million tons of 31. FAO, Crop Prospects and Food Situation. fertilizers are used annually to grow food that is lost or wasted, and 32. FEWS NET, Price Watch, January 31, 2014. between 3,300 and 5,600 million metric tons of CO2 equivalent 33. In the case of Tanzania, low rice prices have also contributed to lower greenhouse gas (GHG) emissions are created (Lipinski et al., maize prices (rice is a substitute for maize in urban areas; FAO, “Reducing Food Loss”). These figures represent 10–15% of total Global Food Price Monitor, February 10, 2014). In Moldova, maize GHG emissions in 2011 (EPA, Overview of Greenhouse Gases, 2014, supplies increased after the suspension of maize exports in 2013, http://www.epa.gov/climatechange/ghgemissions/gases.html); 24% following reduced production in 2012–13 (FAO and GIEWS, of all water used in agriculture worldwide; and the area of Mexico, “Country Brief: Moldova,” February 25, 2013). respectively, as reported by Lipinski et al. (“Reducing Food Loss”). 34. Public procurement programs in Bangladesh; currency depreciation 46. These figures refer to present estimates as reported by Lipinski et al., in Malawi; reduced domestic production in Bolivia; and increasing (“Reducing Food Loss”) and the Waste & Resources Action import demand throughout the year in Peru (FAO, Global Food Price Programme (WRAP) and Reducing Household Food Waste in the Monitor, February 10, 2014; FAO and GIEWS, “Country Brief: United Kingdom (http://www.wrap.org.uk/sites/files/wrap/ Peru,” November 7, 2013, “Country Brief: Bolivia,” December 12, Information%20sheet%20-20reducing%20household%20food%20 2013) contributed to these price increases. waste%20in%20the%20UK%202012_0.pdf). Another study by T. POVERTY REDUCTION & EQUITY DEPARTMENT • WWW.WORLDBANK.ORG/POVERTY POVERTY REDUCTION AND ECONOMIC MANAGEMENT (PREM) NETWORK THE WORLD BANK GROUP 9 Jones (“The Value of Food Loss in the American Household,” Bureau (2010). Solid waste includes, in addition to food, paper, plastic, glass, of Applied Research in Anthropology [2004], as cited by Parfitt other organic waste, construction and demolition debris, hazardous [“Food Waste”]) talks of US$589 worth of wasted food for a family waste, and other waste materials. of four in the United States in the mid-2000s. In the Netherlands, 49. Empirical evidence from econometric analyses indicates that income using data from the Ministry of Agriculture, Nature and Food level is positively correlated to food waste, along with household size Quality, about US$800 per family of four would be thrown away by and demographic composition (see Parfitt [“Food Waste”] and households (€2.4 billion per year out a population of 16.854 million references there). in 2010; http://www.scp-knowledge.eu/sites/default/files/ 50. Overproduction is encouraged when large supermarket chains knowledge/attachments/LNV%20-%20Factsheet%20drieluik%20 impose penalties to suppliers if they fail to deliver agreed quantities A4%20Voedselverspilling%20Eng.pdf). during the year. Also, large field losses occur if physical appearance of 47. Additional evidence of increasing food waste by socioeconomic the product pre- or postharvest does not satisfy certain high cosmetic group is reported by R. Sibrián, J. Komorowska, and J. Mernies standards (IME, “Global Food”). (“Estimating Household and Institutional Food Wastage and 51. Ibid, p. 23. Losses in the Context of Measuring Food Deprivation and Food 52. H. de Groote presented “Economic Analysis of Maize Storage Excess in the Total Population,” FAO Statistics Division, Working Facilities in East and Southern Africa” at the Agriculture and Food Paper Series No. ESS/ESSA/001e, Rome [2014]) for the Philippines Security Post-Harvest Management (PHM) Conference in Sub- using 1978 census data, and for a specific city in Ethiopia by A. Saharan Africa, Addis Ababa, October 29, 2013. Aydamo, A. Nair, and M. Zuberi (“Household Solid Waste Generation Rate and Physical Composition Analysis: The Case of 53. Lipinski et al., “Reducing Food Loss.” Hosa’ina City,” SNNPRS, Journal of Recent Trends on Bioscience 2 54. Another solution advocated by some analysts is the transfer of know- [1], 22–28 [2012]). how and adaptation of agricultural education, training services, and 48. R. A. Richardson and J. Havlicek, “Economic Analysis of Composition management systems to less-developed countries (IME, “Global of Household Solid Wastes,” Journal of Environmental Economic Food”). Management 5, 103–11 (1978); N. Bandara, P. Hettiarachchii, S. 55. http://www.wrap.org.uk/; http://www.eu-fusions.org/what-is-fusions; Wiorasinghe, and S. Pilapitiya, “Relation of Waste Generation and http://www.foodwastealliance.org/. For other examples, see Food Composition of Socioeconomic Factors: A Case Study,” Environmental Tank, “21 Inspiring Initiatives Working to Reduce Food Waste Monitoring Assessment 135, 31–39 (2007); R. Afroz, K. Hanaki, and around the World,” June 3, 2013, http://foodtank.com/ R. Tuddin, “The Role of Socioeconomic Factors on Household Waste news/2013/06/twenty-one-inspiring-initiatives-working-to-reduce- Generation: A Study of Waste Management Program in Dhaka City, food-waste-around-the-wo. Bangladesh,” Research Journal of Applied Sciences 5 (3), 183–90 56. Lipinski et al., “Reducing Food Loss.” POVERTY REDUCTION & EQUITY DEPARTMENT • WWW.WORLDBANK.ORG/POVERTY POVERTY REDUCTION AND ECONOMIC MANAGEMENT (PREM) NETWORK THE WORLD BANK GROUP 10