EUROPE: Food Prices Could Rise Due to Lower Credit Namnews - Tuesday 3rd February 200
Food prices may rise because lower credit may restrict farmers from buying seeds and fertilizers, thus limiting production, according to Peter Brabeck-Letmathe, Chairman of food giant Nestle. In quotes made during the interview, he noted, “Many farmers over the world didn’t have access in October, November, December for credits. They were limited in acquiring seed and acquiring fertilizer.”
Prices of raw ingredients such as wheat, rice, corn and cocoa rose to record highs in 2008, and the UN has warned that food production may drop in the next crop year as falling prices and the recession prompt farmers to lower investment and cut plantings.
Brabeck said that demand for cereals to use as animal feed is growing by 5.4% a year, while demand for cereals for people is rising by 1.3-1.5%. He warned, “It is probable that in 2009 we have a decline in production and we will have an increase in demand. This will have another push on raw materials.”
