Record food prices are instrumental in the upheaval spreading through the Middle East and the situation is going to get a lot worse before it gets any better. Reuters has a good analysis of what's happening and what that's likely to mean:
Catastrophic storms and droughts have slammed the world's leading agriculture countries in recent months, including flooding and a massive cyclone in Australia and a powerful winter storm that swept across the United States.
Dubbed " Stormageddon," one of the biggest snowstorm in decades dumped up to 20 inches of snow in some parts of the U.S. grain belt this week, paralyzing the shipment of grain and livestock.
A deep-freeze forecast for the Midwest, the bread basket of the United States, threatens the region's winter wheat because it may lack sufficient insulating moisture to withstand the cold.
Sugar prices also have surged to three-decade highs on fears of damage Cyclone Yasi would bring to the Australian cane crop. Prices for Malaysian palm oil, a cooking staple in the developing world, hit 3-year highs on flooding.
Big companies have had to adjust to higher raw material costs. Kellogg Co, the world's largest breakfast cereal company, said on Thursday it has boosted prices on many of its products to offset rising costs for ingredients such as grains and sugar.
During the last food price crisis, the World Bank estimated that some 870 million people in developing countries were hungry or malnourished. The FAO estimates that number has increased to 925 million.
" 2008 should have been a wake-up call, but I'm not yet sure all the countries in the world that we need to support this have woken up to it," the World Bank's Zoellick said.
Indonesia, Southeast Asia's biggest economy, last week bought 820,000 tons of rice, lifting rice prices, while suspending import duties on rice, soybeans and wheat.
Algeria last week bought almost 1 million tons of wheat, bringing its purchases to at least 1.75 million since the start of January, and ordered a speeding up of grain imports.
On a day of bloody confrontation in Egypt, where protesters are demanding an end to the 30-year rule of Hosni Mubarak, the U.N. World Food Programme's Executive Director Josette Sheeran said the world was now in an era where it had to be very serious about food supply.
" If people don't have enough to eat they only have three options: they can revolt, they can migrate or they can die. We need a better action plan," she said.
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4 comments:
I have a friend in Egypt and for years she has been telling us of how the World Bank and USAID et al have been pushing their seed over indigenous seeds. Egypt actually had laws that made it illegal to farm with indigenous seeds.
The havoc that the west has played on the developing world is hopefully coming to an end, and hopefully not too late.
It may be coming to an end but I don't think it ends well. Egypt is facing serious threats to the Nile from upstream nations who want a bigger share of its waters and are beginning major dam projects.
Food is the immediate and intermediate threat to much of the Middle East, South Asia, Africa and South America. Water, however, is the critical problem that underlies the existing food troubles and will be calamitous to these regions in the long run.
I read today a comment attributed to a NOAA scientist that, over the past forty years, the atmosphere has absorbed four percent more moisture. That's an astonishing amount of water, mainly surface water, that has been lost to man and the rest of life on earth.
Not only is that water vapour a potent greenhouse gas, it also fuels stronger storm events, changes precipitation patterns and, in some places, comes down in torrents of floodwaters.
This is the new reality, BY. I believed we were 20-years away from this. It's hard to believe that this isn't even on the radar screens of any of our federal politicians. I only hope we, and particularly our children and grandchildren, don't pay dearly for today's neglect.
You forgot to mention the futures speculation on Wall Street that drives the prices of commodities up and the fact that the US is printing dollars which brings down the value of other currencies and makes it harder to buy commodities.
@ Anon. You're quite right. Outfits like Goldman Sachs have a huge grain commodities racket going on now that is indeed gaming the world food markets. To me, it's the height of greed-driven depravity. So that a few can make vast profits for actually contributing nothing, masses will go hungry or even die.
Commodities trading was intended to be a vehicle allowing farmers the funds they needed to plant and harvest their crop. It's now used to leverage excess profits out of crop shortages, a self-fulfilling racket.
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