Feb 4 - A lack of credit for seeds and fertilizers for farmers over the last six months could limit food production and trigger a new wave of price rises, Nestle Chairman Peter Brabeck-Letmathe has warned.
The chairman of the world’s largest food company said: “Many farmers over the world didn’t have access in October, November, and December for credits. They were limited in acquiring seed and acquiring fertilizer.”
Speaking at the World Economic Forum, in Davros, Switzerland, Mr Brabek said demand for cereals for use as animal feed was rising at almost 5.5% annually, while demand for cereal for human consumption was increasing by up to 1.5% per year.
“It is probable that in 2009 we have a decline in production and we will have an increase in demand,” he said. “This will have another push on raw materials.”
The food price index published by the United Nations fell to 148 points from a June 2008 high of 219 – the six consecutive monthly drop.
Some analysts fear plummeting food prices may prompt farmers to lower plantings and investment – leading to drop in crop production in 2009.
Cocoa prices in London recently have hit highs not seen in almost a quarter of a century while coffee tariffs have risen between 5-8%. However, CBOT wheat and corn prices have tumbled in recent months.