Another food crisis on the horizon
Swinging prices of crops this season, mostly on an upward direction, makes it extremely difficult for poor people across the world to counter everyday life.
Skyrocketing prices of food have sparked riots in numerous countries recently. Millions are reeling from sticker shock and governments are scrambling to staunch a fast-moving crisis before it spins out of control.
Protests have turned violent in most regions were riots broke out. Rioters tore through three cities in the West African nation of Burkina Faso in September, burning government buildings and looting stores.
Former US president George Bush ironically attributed food shortages to increased consumption by rising population in India and China.
Of course that view is true to certain extent as billions of people are buying ever-greater quantities of food especially in booming China and India, where many have stopped growing their own food and now have the cash to buy a lot more of it.
Increasing meat consumption, for example, has helped drive up demand for grain, and with it the price.
Oil price hike also adds up to food price increase as it will push up cost of trucking food from farms to local markets and shipping it abroad.
Then there is climate change. Harvests have been seriously disrupted by freak weather, including prolonged droughts in Australia and southern Africa, floods in West Africa, and this past winter's deep frost in China and record-breaking warmth in northern Europe.
Some analysts attributed high commodity prices to global rush towards investing in commodities as currencies get devalued by countries eager to increase exports in a zero sum game.
Wheat Prices were the first to rise after Russia stopped exports leading to the sharpest gain in the last 2 years.
Corn prices have increased with increased demand from ethanol, Rice and Soybean prices were bound to rise in empathy with other grain prices.
Rice futures is likely to extend their rallies to next year on increased demand and crop losses in the biggest producers may curb global supply.
Exports from major producers India, China, Thailand, Vietnam, Pakistan and the U.S, which account for about 80 percent of global trade, will gain 8.4 percent from a year earlier to 24.7 million metric tons this year, draining stockpiles.
Hot weather was forecast to curb yields in the U.S. as rice crops in Thailand and Vietnam, the two largest exporters, and the Philippines, the biggest buyer, were hurt by excessive rains and flooding.
Though, crop prices had a bit of pull back in early November due to Chinese demand concerns, the cold winter expected from La Nina has fuelled speculation that even southern hemisphere crops may struggle, and once again send prices higher.
Some analysts blamed globalization of agriculture for rising food prices. They said the worst affected will be the most vulnerable poor sections which live on the brink of starvation. Food prices rise in India has already led to widespread distress last year and this adverse scenario likely to extend in coming years as well.
Wheat prices have climbed nearly 40 percent in the last few months. Russia’s wheat production is expected to decline by almost 30% in 2010 leading to a sharp fall in exports.
The increase in wheat prices has been sharper than in 2008 due to fears of shortage of global supply.
Meanwhile, China’s worst flooding since 1998 threatens to cut the rice production which has led to increase in global rice prices already. China produces 1/3rd of the world’s rice or 137 million tons which might be reduced by 10% due to these floods.
Rice prices are expected to rise further due to these floods which have killed almost 1000 people Prices of pork which is heavily consumed in China have also risen steeply leading to fears of increased food inflation.
One thing is very clear, the world not only needs to produce more foods but also to adopt a strategy so that it will reach all corners of the world.
Skyrocketing prices of food have sparked riots in numerous countries recently. Millions are reeling from sticker shock and governments are scrambling to staunch a fast-moving crisis before it spins out of control.
Protests have turned violent in most regions were riots broke out. Rioters tore through three cities in the West African nation of Burkina Faso in September, burning government buildings and looting stores.
Former US president George Bush ironically attributed food shortages to increased consumption by rising population in India and China.
Of course that view is true to certain extent as billions of people are buying ever-greater quantities of food especially in booming China and India, where many have stopped growing their own food and now have the cash to buy a lot more of it.
Increasing meat consumption, for example, has helped drive up demand for grain, and with it the price.
Oil price hike also adds up to food price increase as it will push up cost of trucking food from farms to local markets and shipping it abroad.
Then there is climate change. Harvests have been seriously disrupted by freak weather, including prolonged droughts in Australia and southern Africa, floods in West Africa, and this past winter's deep frost in China and record-breaking warmth in northern Europe.
Some analysts attributed high commodity prices to global rush towards investing in commodities as currencies get devalued by countries eager to increase exports in a zero sum game.
Wheat Prices were the first to rise after Russia stopped exports leading to the sharpest gain in the last 2 years.
Corn prices have increased with increased demand from ethanol, Rice and Soybean prices were bound to rise in empathy with other grain prices.
Rice futures is likely to extend their rallies to next year on increased demand and crop losses in the biggest producers may curb global supply.
Exports from major producers India, China, Thailand, Vietnam, Pakistan and the U.S, which account for about 80 percent of global trade, will gain 8.4 percent from a year earlier to 24.7 million metric tons this year, draining stockpiles.
Hot weather was forecast to curb yields in the U.S. as rice crops in Thailand and Vietnam, the two largest exporters, and the Philippines, the biggest buyer, were hurt by excessive rains and flooding.
Though, crop prices had a bit of pull back in early November due to Chinese demand concerns, the cold winter expected from La Nina has fuelled speculation that even southern hemisphere crops may struggle, and once again send prices higher.
Some analysts blamed globalization of agriculture for rising food prices. They said the worst affected will be the most vulnerable poor sections which live on the brink of starvation. Food prices rise in India has already led to widespread distress last year and this adverse scenario likely to extend in coming years as well.
Wheat prices have climbed nearly 40 percent in the last few months. Russia’s wheat production is expected to decline by almost 30% in 2010 leading to a sharp fall in exports.
The increase in wheat prices has been sharper than in 2008 due to fears of shortage of global supply.
Meanwhile, China’s worst flooding since 1998 threatens to cut the rice production which has led to increase in global rice prices already. China produces 1/3rd of the world’s rice or 137 million tons which might be reduced by 10% due to these floods.
Rice prices are expected to rise further due to these floods which have killed almost 1000 people Prices of pork which is heavily consumed in China have also risen steeply leading to fears of increased food inflation.
One thing is very clear, the world not only needs to produce more foods but also to adopt a strategy so that it will reach all corners of the world.
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