Blog about the upcoming food shortage crisis

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

Global food crisis looms as grain prices soar

Foreign Staff

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RICE and maize hit record prices yesterday on speculation that global demand for cereals would not be met as governments in producer countries curb exports to prevent protests.
Rice, the staple food for about 3-billion people — nearly half the world’s population — rose 2,4% in Chicago yesterday after doubling in the past year. Soya beans advanced for the third day and wheat also rose.
Harvests have been reduced by drought in countries including Canada and Australia, and by a US freeze followed by excessive rain last year. China, India and Vietnam have cut rice exports and Indonesia has reduced import tariffs to protect food supplies and cool inflation.

Steep increases in food prices have been the main driver of world inflation — and the same is true of SA, where commodities such as maize are priced internationally.

SA’s food price inflation rose to 14,1% in February from 13,4% in January, with steep increases in grain products (where the inflation rate was running at 20,8%), as well as in meat, milk cheese, eggs and vegetables. Higher food prices accounted for about a third of February’s inflation rate of 9,8%, making them the biggest single driver.

Severe weather in producing countries and a boom in demand from fast-developing countries have pushed up prices of staple foods by 80% since 2005.

Last month, rice prices hit a 19-year high; wheat prices rose to a 28-year high and almost twice the average price of the past 25 years.

World Bank president Robert Zoellick called yesterday for a co-ordinated response to the spiralling prices, which “were exacerbating shortages, hunger and malnutrition around the globe”. He said 33 countries could face social unrest because of higher food and energy prices.

Speaking ahead of International Monetary Fund and World Bank meetings in Washington next week, Zoellick said the crisis required the attention of political leaders in every country, since high prices and price volatility were likely to stay for some time. The crisis also highlighted the need to conclude a long-awaited deal in the Doha trade talks, which would cut distorting subsidies and open markets for food imports.

“We need a new deal for global food policy that should focus not only on hunger and malnutrition, access and supply, but also on the interconnections with energy, yields, climate change, investment, the marginalisation of women and others, and economic resilience and growth.”

A fairer, more open global trading system would give farmers in developing countries more opportunities and confidence to expand food output.

“The solution is to break the Doha development agenda impasse this year,” Zoellick said. “There is a good deal on the table. It’s now or never”.

Agreement on contentious agriculture issues is the key to striking a trade deal in talks that began in 2001.

Around the world, protests against food prices are increasing and governments are responding with often counterproductive controls on prices and exports, he said.

With shifting populations, higher energy prices and demand for biofuels draining maize stocks, no one country can deal with the problem alone, Zoellick said.

“We need a stronger delivery system, to overcome fragmentation in food security, health, agriculture, water, sanitation, rural infrastructure, and gender policies. A shift from traditional food aid to a broader concept of food and nutrition assistance must be part of the deal.”

Zoellick said the response should begin with helping the most needy and called on rich nations to fill the $500m funding gap at the United Nations’ World Food Programme to provide food aid to the world’s poorest. With Reuters, Bloomberg.



April 4, 2008 - Posted by | Uncategorized

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