World food price surge to spell disaster for poorest

Next year will prove to be a very difficult one for the hungry. World food stocks have fallen to dangerously low levels.

The UN estimates there will be 5.5% less wheat on the world market in 2013.
If the world experiences another shock, such as the droughts experienced in the US and Russia this year, 2013 could prove to be catastrophic for those who already struggle to feed themselves and their families.

The world's poorest people spend between 50% and 90% of their income on food, compared with just 10%-15% in developed countries.

Even a small price increase will mean families are forced to take their children out of school, sell possessions, or go without vital medicines in order to put food on the table.

Putting a stop to the pending food price crisis requires a radical new approach to the way we grow and manage food. Read more >>

Food Prices Jump to Six-Month High as Dairy Costs Rise

World food prices rose in September to the highest in six months as dairy and meat producers passed on higher feed costs to consumers, the United Nations’ Food & Agriculture Organization said.

An index of 55 food items tracked by the FAO rose to 215.8 points from a restated 212.8 points in August, the Rome-based agency reported on its website today. Dairy costs jumped the most in more than two years.

Livestock breeders and dairy farmers are passing on the higher cost of feed, after grain prices jumped in June and July, according to Abdolreza Abbassian, an economist at the FAO in the Italian capital. Higher prices don’t mean a food crisis is imminent, he said today by phone.

“Despite a very difficult market, the fundamentals that suggest a food crisis are just not there,” Abbassian said. “Market sentiment is now accepting high prices more as a rule than as an exception.” Read more >>

We'll make a killing out of food crisis - commodities trading boss

The United Nations, aid agencies and the British Government have lined up to attack the world's largest commodities trading company, Glencore, after it described the current global food crisis and soaring world prices as a "good" business opportunity.

With the US experiencing a rerun of the drought "Dust Bowl" days of the 1930s and Russia suffering a similar food crisis that could see Vladimir Putin's government banning grain exports, the senior economist of the UN's Food and Agriculture Organisation, Concepcion Calpe, told The Independent: "Private companies like Glencore are playing a game that will make them enormous profits."

Ms Calpe said leading international politicians and banks expecting Glencore to back away from trading in potential starvation and hunger in developing nations for "ethical reasons" would be disappointed. Read more >>

Global food chain stretched to the limit

Image by magharebia via FlickrStrained by rising demand and battered by bad weather, the global food supply chain is stretched to the limit, sending prices soaring and sparking concerns about a repeat of food riots last seen three years ago.

Signs of the strain can be found from Australia to Argentina, Canada to Russia. On Friday, Tunisia's president fled the country after trying to quell deadly riots in the North African country by slashing prices on food staples.

The U.N.'s fear is that the latest run-up in food prices could spark a repeat of the deadly food riots that broke out in 2008 in Haiti, Kenya and Somalia. That price spike was relatively short-lived. But Abbassian said the latest surge in food stuffs may be more sustained. Read More...

World on brink of social unrest over food prices

Violence in Algeria could be the start of protests over rising costs of essential commodities such as grain and meat.

Dubai: Protests by angry youths in Algeria are just one example of the alarming signs on the horizon with regard to rising food prices.

Food inflation in many Asian countries, including China and India, is in double digits. The Kenyan government has issued a drought and famine alert after reports of several people having died from hunger-related causes.

International organisations are talking of "a food price shock" hitting the world.

With food supplies and prices making headlines around the globe for the second time in less than three years, experts are warning of the possibility of social unrest sweeping through poor countries. More...

Commodity price surge sets stage for global food crisis in new year

Barry Grey
The price of traded food staples such as wheat, corn and rice soared 26 percent from June to November, nearing the peaks reached during the global food crisis of 2008, according to the Food Price Index kept by the United Nations' Food and Agriculture Organization.

The price surge has continued in December, with foodstuffs and basic commodities hitting new highs and expected to climb further in 2011.

The new explosion in commodity prices is being fueled by the cheap credit policies of governments and central banks in Europe, Japan and, above all, the United States, where core short-term interest rates remain near zero. These policies, most critically the renewed turn by the US Federal Reserve to so-called “quantitative easing,” are designed to boost national stock markets and business profits by providing the banks and corporations with virtually free credit.

The Federal Reserve in November announced that it would purchase $600 billion in US Treasury securities by, in effect, printing dollars. This cheap-dollar policy has the effect of debasing the world’s primary trading and reserve currency, thereby fueling inflationary tendencies around the world and increasing the flow of hot money to emerging economies with faster growth and higher interest rates.

The impact is vastly destabilizing and exacerbates global economic imbalances. It also provides banks, hedge funds and corporations with wide vistas for speculation on commodity prices.

In the US alone, corporations and banks are sitting on some $3 trillion in cash which they refuse to invest in production and hiring. A good portion of the global surfeit of cash is being used to ramp up the prices of commodities―from oil, copper, cotton, gold and silver to food staples such as wheat, corn, rice and soybeans. More...

Food prices may rise by up to 20%, warns UN

The UN today warned that food prices could rise by 10%-20% next year after poor harvests and an expected rundown of global reserves. More than 70 African and Asian countries will be the worst hit, said the Food and Agricultural Organisation in its monthly report.

In its gloomiest forecast since the 2007/08 food crisis, which saw food riots in more than 25 countries and 100 million extra hungry people, the report's authors urged states to prepare for hardship.

"Countries must remain vigilant against supply shocks," the report warned. "Consumers may have little choice but to pay higher prices for their food. The size of next year's harvest becomes increasingly critical. For stocks to be replenished and prices to return to more normal levels, large production expansions are needed in 2011."

Prices of wheat, maize and many other foods traded internationally have risen by up to 40% in just a few months. Sugar, butter and cassava prices are at 30-year highs, and meat and fish are both significantly more expensive than last year. More...