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BY MOHAMMAD SHOEB
DOHA: Rising world food prices will affect the local market and people will have to adjust their consumption patterns accordingly to cope with the situation, a senior official of Hassad Food company told The Peninsula yesterday.
With the United States slashing its expectations for corn and soybean production for the second consecutive month, as the country is facing a worst drought in a half century. Experts are predicting lowest average yield of corn by over 17 percent. Owing to that global food prices are further expected to soar by 20 to 25 percent in the coming days.
Dr Hamad Saad Al Saad, Advisor to the Chairman of Hassad Food, said: “If the global food prices continue to increase, it will surely have an adverse impact on the local food prices, and we should be prepared to face such situations.”
Asked if the government price support policy is extended to other staple food items like subsidised wheat flour, will it help curb the inflation, he said: “Any initiative from the government in this regard will definitely have a positive impact on the prices, but if the situation continues to linger for a longer period of time it will not be an economically feasible solution.”
Sounding similar apprehensions, Nasser Al Shafi, an economist, told local Arabic daily Al Arab, yesterday that “although it is less, but due to huge government expenditure on infrastructure projects, we already have inflationary pressures in the market, and the anticipated rise in the global food prices will worsen the situation.”
While in contrary, Nasir Mohammed Al Hajri, CEO of Hassad Food was reported in the daily as saying that the US drought will not have any adverse impact in the local market as Qatar enjoys a vibrant food security programme combined with a diversified source of import. According to recent estimates the production of corn and soybeans in the US would be the lowest level since 1995 due to sever weather conditions.
The country grows world’s 40 percent of the corn and soybean, and 20 percent of global wheat production. But surprisingly, about 40 percent of the total corn produced in the US goes for ethanol (for bio-fuel) production, and the rest finds its use as animal feed, processed food and exports.
Worse, unfavourable weathers have also affected crops in other major export countries such as Australia, India, Brazil and Russia.
The already tightened market with limited supply will translate into further rise in the prices of food items and animal feed.
Recently, the UN Food and Agriculture Organisation (FAO) said that global food prices soared by six percent in July due to 23 percent rise in the price of corn. And import countries like China and Mexico would be hardest hit. Citing environmental concerns, the US uses a substantial percentage of global corn production to produce bio-fuel to run oil guzzling cars resulting in high food prices.
Currently there is an ongoing widespread debate over the use of corn for ethanol production as the critics say that the practice is the major reason for quadrupling in the process of corn over the last few years.
However, officials and experts in Qatar are in denial mode and say that the impact of US drought will be confined within the country and the prices of food in the local market will not be affected and Qatar will largely remain resilient despite being part of the global economy.