Global food prices are falling and in Arab countries they are rising

Reuters quoted the United Nations Food and Agriculture Organization (FAO) as expecting global food prices to continue falling this year, after stabilizing near their lowest level in seven years under the pressure of slowing global economic growth. 

The FAO index, which measures monthly changes in a basket of cereals, vegetable oils, dairy products, meat and sugar, has fallen in each of the past four years.

The impact of the global food decline in Arab countries

What matters to us in the Arab world is whether world food prices are falling in our Arab countries or not! Based on this observation, we find that the reality indicates that the prices of food and basic materials have risen and risen in several Arab countries, including Egypt, Syria, Yemen, Libya and countries in conflict.  we say their prices have gone down or up.

The case of the drop in food prices is similar to the drop in energy prices, since the world price of a barrel of oil has reached nearly 30 dollars without there being a tangible drop in the prices of fuel and petroleum derivatives in Arab countries.  is that the Arab citizen in most countries cannot bear the real price of the basic materials, but the government subsidizes a large part of the prices of these materials, so the price drop first appears in the bill of the government and not in the citizen's bill, and secondly, the government must translate the overall declines in the prices of the raw materials which it subsidizes to the citizen, but this is not done because it mainly suffers from a financial deficit in the budget If the food, grain or fuel bill that he receives from abroad goes down, he pumps what he has saved to pay his financial shortfall, and so the overall fall in basic commodity prices does not does not affect materials in Arab countries.

Theoretically, if the citizen pays the real price of the commodity, and the price is fully liberalized, that is, it is the market forces of supply and demand that determine the price through this imports or what it produces, then the fall in the world price will directly affect the citizen, since an Arab country does not grow wheat and the government By instructing traders to import wheat from many destinations and sell it to the local mills after a slight increase in it as a profit for the importer, to make flour out of it and then into bread, and the citizen here buys bread at its real price, not at all subsidized by the government, then we will find that the price of bread varies according to the world price of wheat which merchants import from abroad, whereas if the government intervened and bought wheat by itself from abroad or through agents for him and shared the cost with the citizen, the drop in the world price would affect the government bill, and so he would have options: either lower the price or the government would withdraw the excess amount and would save it with him or spend it on other services and products, or to pay off their financial shortfall, if any. 

Coming back to the FAO, according to Reuters information, prices last month stabilized near seven-year lows as higher vegetable oil and meat prices offset the impact of lower prices.  prices of cereals, sugar and dairy products.

again".

The FAO said this month that global cereal production and demand for the 2015-2016 season would each balance out, totaling 2.52 billion tonnes, leaving ending stocks virtually unchanged from the previous year.

 Food and Agriculture Organization of the United Nations

It has an index used to measure the monthly change in the international prices of a basket of basic food products. It is made up of the average of the five product group price indices, weighted by the share of exports of each of the groups during the period 2002 to 2004. The results of the measurements are published monthly, and the dates of the monthly publications date from for that month were March 3 and the following month April 7. The price indices are: prices of foodstuffs, cereals, vegetable oils, sugar, meat and dairy products.

Ultimately, we must point out that how the government manages the country's capabilities and the political economy model it follows, whether socialist, capitalist or mixed, is what affects commodity prices.    , food products and petroleum derivatives. coming from abroad. It is better, instead of our economies being exposed to the outside world and affected by all the hazards, that prices have fallen or risen, that we rely on our raw resources at our disposal and that we seek, instead of exporting raw materials to be produced locally and try as much as possible to reduce imports and replace them with local products, and to encourage local variety.    And if we are a non-agricultural country or have no oil resources, sustainable solutions abound today, such as taking advantage of renewable and clean energy. It should also be noted that the achievement of economic integration between Arab countries enhances exchanges between Arab countries. What is missing in one country is present in another neighboring country, for me.