(Version in Español) World food prices are on the rise again
owing mainly to global weather-related shocks. This has led to
concern that the rise could result in higher inflation and hurt
the most vulnerable. Two points to note are that the recent
increase in food prices has been less acute than the two
previous episodes (in mid-2008 and early 2011), and features
important differences across commodities. For example, while the
price of soybeans, corn and wheat are up sharply, coffee and
sugar prices are down. Market projections suggest that corn,
soy, and wheat prices will stay high through end-2012, but then
decline gradually as supply conditions normalize. Watching out
for inflation The impact on domestic inflation in Latin America
and the Caribbean of the latest food price shock is beginning to
be felt, although the pass-through to core (or underlying)
inflation has been relatively limited thus far. Monetary
authorities need to remain vigilant, however, as the impact of
global food price shocks on inflatio