Blog about the upcoming food shortage crisis

Everybody throws stones at the prophet, but when the crisis comes they yell: “Why nobody warned us?”

Food riots and oil shortage: It looks like we are heading into the past again

Reuters reports food riots in the several countries: Peru, Indonesia, Argentina, Mozambique, Mauritania, Cameroon and Burkina Faso. These are caused by the increasing food prices and the price of oil. However the strange pattern emerges as we look at the case of Peru, where farmers protest a free trade deal with the United States, that will flood the local markets with food from the United Stated.

Should not it be strange that in the very situation when farmers should benefit, they become hit again and again? Why would Peru want a cheap food from the United States?

While riots happen in the various countries across the world, The National Post writes about major rice exporters such as Egypt, Thailand and Vietnam cutting exports to feed their own people. It means that the move will only escalate the rising prices of the food.

World Aid program of the United Nation has become 55% more expensive and despite getting additional $500 mln funding it has to decrease the aid.

Author gives several reasons for the crisis: 1. Rising demand for the Western style diet in India and China, which means more grain and beef is needed. (and it also takes a lot of grain to feed cattle) 2. Increasing biofuels production by the Western Countries – and the wheat will go where prices are better. 3. Finally, it is the low preparedness of the world, as the current food supply system is fragile and stockpiles can only provide 17% of annual demand of food.

Alan Scher Zagier from Associated Press, takes a look at how the food price inflation, also referred to as agflation is changing the consumption patterns. This is the reaction article where writer talks to people and finds out how the price change affects their lifestyle.

“For Peggy and David Valdez of Houston, feeding their family of four means scouring grocer ads for the best prices, taking fewer trips as a way to save gas and simply buying less food, period.
“We do more selecting, looking around, seeing which prices are cheaper,” said David Valdez. “We are being more selective. We have got to find the cheapest price.””

People in the United States have become affected by the crisis and now have to make less shopping trips, buy less food and stop going to the restaurants as they could not afford it anymore. All that with the increasing rent and taxes adds a very grim outlook for the West.

Have a good day!

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April 1, 2008 - Posted by | Uncategorized

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