Blog about the upcoming food shortage crisis

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

Todays pain and hunger

Guardian has released an article devoted to the food shortage crisis. In it John Vidal the environment editor places a considerable level of blame on the Western countries, which since 2006 diverted 20% of USA grain production to the biofuels.

Africa is the worst hit by the crisis as it imports 40% of its food. Food riots sparkle across 33 countries where people are protesting against rising food prices. The situation is astounding: food is on the shelves but people could not afford it.

In the desperate attempts to easen food crisis governments are removing duties on food and release taxes, however farmers are reluctant to sell, as they expect grain prices to hit $ 1000 a ton.

Full article is here.

The assuring new come from Phillipines where the government has allocated P47 billion in order to help to easen the crisis. “The multi-billion package had been clustered into six areas namely fertilizer, irrigation, extension and education, loans and insurance, dryers, and seeds (FIELDS). ”

Hopefully the money will be used effectively and help to solve the problem in Phillipines, which are hit  by the decision of Vietnam to decrease the food exports. Read here.

Finally we have a bad news: Haitans killed in the food riots – here. And US governement deciding to submit and loosen cloned food rules – here.


April 5, 2008 Posted by | Uncategorized | Leave a comment

The looming food crisis – how ready is Ghana?

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Myjoyonline Ghana News Photos | Kenkey - a Ghanaian staple.
Kenkey – a Ghanaian staple.
There are clear signs on the wall that the world is in crisis. There is food crisis in most parts of the world, and the World Bank is already concerned that there would be food prices related conflicts and riots in some parts of the world.

The crisis is not necessarily as a result of shortage of food, but the rise in world food and energy prices. This would exacerbate world hunger and malnutrition, and Ghana could be affected, unless the appropriate steps are taken.

On March 7 2008, I wrote an article titled, ‘Rise in world food prices has implications for Ghana’, drawing attention to the possible ripple effects of the rise in world food prices on Ghana. The article was published on myjoyonline. And if readers’ comments to stories on this site is the basis for determining the popularity of stories published, then that article received very little attention, because there is only a single reader’s comment to that story. Probably, the warning was not strong enough to generate any public interest.

But as I write, only last Tuesday April 1, 2008, a riot broke out in Cote d’ Ivoire over rising food prices leading to one death and injury to about 10 others, forcing President Gbagbo to cancel custom duties and cut taxes on household products.

The BBC reported riots in other West African countries including Cameroon, Burkina Faso and Senegal.

And the World Bank estimates 33 countries face potential social unrest because of rising food and energy prices.

How ready is Ghana to avert any such crisis resulting from the rise in world food prices which the government has no control over?

Wheat and rice prices for delivery in March 2008 have jumped to an all-time record, soyabean prices are at a 34-year high and corn prices at an 11-year peak.

The new benchmark prices for corn are also more than 5 per cent higher than previously. Corn for March 2008 rose to $4.43¼ a bushel, the highest level in 11 years for a front-month contract.

For instance, the US Department of Agriculture has predicted that global corn stocks will fall to a 33-year low of just 7.5 weeks of consumption, while global wheat stocks will plunge to their lowest level in at least 47 years at 9.3 weeks.

In response to the dire situation the prices are expected to engender, the President of the World Bank, Robert Zoellick was reported by the BBC to have said that the top priority in addressing the challenge was to give the UN World Food Programme an extra $500m for emergency food aid.

And the World Bank president also believes that funds should be made available to help build local food markets and boost agricultural productivity which could create a “green revolution” for sub-Saharan Africa.

Zoellick said “The poor need lower food prices now. But the world’s agricultural trading system is stuck in the past.”

“If ever there was a time to cut distorting agricultural subsidies and open markets for food imports it must be now.”

The WFP however, sees an opportunity in the crisis. They argue that, the rise in food prices opens up a market for small holder farmers to make more money for their produce. That also opens up agriculture to investments because it has become profitable.

Investments in irrigation, high yielding seeds, equipment and training in human resources for the sector has now become lucrative because of the possible high return on investments in the sector due to the high prices for food.

Cote d’ Ivoire is next door to Ghana, and I hope the incidents there can and should serve as a warning to us.

‘A stitch in time’, the sages say, ‘saves nine’. Ghana can’t afford to play games with the reality staring us right in the face. By now a national programme to address the issue should be rolled out and all stakeholders should be involved, because the good people of Ghana can’t afford to wait for the worse to happen.

Authored by Emmanuel K. Dogbevi


April 4, 2008 Posted by | Uncategorized | Leave a comment

Asia can overcome food, fuel inflation – World Bank

Fri Apr 4, 2008 12:47pm IST

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By Vithoon Amorn

DANANG, Vietnam (Reuters) – The economies of East Asia are sound and should be able to weather a slowdown as well as inflationary pressures from the high price of rice and other commodities, a senior World Bank official said on Friday.

Global rice prices have been rising since October when India, which normally exports 4 million tonnes annually, banned exports of non-basmati rice.

Other major producing countries like China, Egypt and Vietnam have also curtailed exports of rice, the staple food of about half of the world’s 6.6 billion people, threatening to drive prices even higher and heightening food security fears.

“High and rising food prices, especially rice prices, posed a special challenge,” Juan Jose Daboub said in a statement at a two-day meeting of Asian finance ministers in Danang, Vietnam.

“Governments needed to take short-term steps to protect the poor, but also to ensure that long-term solutions were found to relieve shortages,” said Daboub, a World Bank managing director and one of three deputies to its president, Robert Zoellick.

Inflation across the region was contributing to significant reductions in the incomes of the poor, who have to spend between one-third and two-thirds of their income on food, Daboub said.

However, he cautioned against adopting excessive state subsidies to deal with food inflation, saying that could seriously strain fiscal positions and distort markets.

Daboub’s statement to the 10-nation ASEAN group on the global slowdown said the region was “positioned well to weather the downturn, thanks to sound economic management, strong growth and accumulated reserves over the past decade”.

A World Bank report on Tuesday said Asia faced a tough job in managing inflation at a time when economic growth was slowing.

Rising food and fuel prices have helped drive inflation to a 26-year high in Singapore, a 14-month high in India and the highest in more than a decade in Hong Kong, China and Vietnam, which is hosting the Association of South East Asian Nations (ASEAN) meeting.

The Philippines, one of the world’s biggest rice importers, has sought to buy large shipments from Vietnam and Thailand to replenish its dwindling stocks.

The government wants to have enough rice for 30 days of consumption before July, when the supply of local rice dwindles.


April 4, 2008 Posted by | Uncategorized | Leave a comment

UN official: Philippine gov’t taking right steps on food issue 2008-04-04 14:35:36 Print
    MANILA, April 4 (Xinhua) — The Philippine government is taking right steps to prevent a possible food crisis, an official of the United Nations’ World Food Program (WFP) said on Friday.

    “Initially, we wouldn’t have been so concerned about the Philippines because it already is responsible for growing internally about 85 percent of the food that it consumes,” Valerie Guarnieri, WFP’s country director in the Philippines, told local media.

    Guarnieri said the Philippine government can fill up the remaining 15 percent by just making “extra efforts” to get commitments from other countries to supply the food needed by the country, Philippine TV network ANC reported.

    She said securing rice imports is one of the two best ways to prevent a food crisis in the country, which she said is being “aggressively” pursued by the government.

    Philippine President Gloria Macapagal-Arroyo had announced that Vietnam has committed to sell the government 1.5 million metric tons of rice, which she said will augment the country’s rice supply starting June.

    Arroyo had also said that she plans to convince Thailand to sell additional rice for the country.

    The government has also started the process of providing rice stubs to poor Filipinos, as well as other measures to mitigate the rising prices of rice.

    The National Food Authority has started selling 18.50 pesos (0.44 U.S. dollars) per kilo rice in poor communities.

    The other way to mitigate the increasing prices of staple needs is to provide food subsidies to the poor, which Garnieri said is already being done by the Philippine government.

    Guarnieri said the increasing prices of rice, and its possible unavailability in the world market, can turn out as a positive development for Philippine agriculture, especially for the farmers.

    Countries, including the Philippines, would have to “reemphasize the need to look also at local production” now that there is a looming world food crisis, she said.

    In the Philippines, she said, the government should focus on measures on how to improve measures that would not only increase food security, but also “benefit poor farmers.”


Editor: Sun Yunlong


April 4, 2008 Posted by | Uncategorized | Leave a comment

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 | Leave a comment

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!

April 1, 2008 Posted by | Uncategorized | Leave a comment

All along food distribution chain, rising prices felt

 March 30, 2008
MONTPELIER, Vt.—Whether making bread for a living or merely shopping for it at the supermarket, Vermonters are feeling the brunt of sharply rising prices for grains and other food products.
“I shop around. I look for deals,” said Pat Lesure, a state employee who was shopping at the Price Chopper in Berlin on Friday. “But it’s a struggle now. It really is.”
Food prices were up 4 percent in 2007 the largest jump in nearly two decades, according to the U.S. Bureau of Labor Statistics, after rising 2.4 percent in both 2005 and 2006.
The bureau reports that the price of bread is up 30 percent since February 2006. The national average price for a dozen eggs is up 84 cents, to $2.17. Orange juice is up to an average of $2.53 for 12 ounces of frozen concentrate, from less than $1.90 two years ago.
Price increases are being felt at the wholesale level as well.
Paul Manghi, owner of Manghi’s Bread in Montpelier, said he had been forced to raise his wholesale prices by 11 percent because of the rising cost for ingredients.
“Things like sunflower oil and spelt flour have gone up in the range of 50 percent,” he said. “And wheat flour has gone up more than 200 percent.”
“We just make what we make, and any cost increase we experience we just have to pass on to the customer,” Manghi added. “We don’t know yet how people will react to this, but so far we haven’t seen any negative impacts.”
Another 4 percent jump in food prices is forecast for this year, said Ephraim Leibtag, an economist with the Economic Research Division of the U.S. Department of Agriculture.
“This is the largest increase in recent memory,” he said. “Since the 1990s food prices and inflation have been so stable, and thats why this increase is getting so much attention now.”
At Norwich-based King Arthur Flour, spokeswoman Allison Furbish said increased exports, higher fuel costs and farmers converting wheat fields to corn for ethanol production are combining to send wheat prices spiraling upward.
King Arthur has posted a notice prominently on its Web site describing the situation. “People are going to notice price increases, and we feel its important for them to understand why,” Furbish said.
A 5-pound bag of flour that cost $2.89 a year ago will be up to $4.99 by April, she said.


March 31, 2008 Posted by | Uncategorized | Leave a comment

Guardians Thailand correspondent Ian MacKinnon writes about an amazing new feature of the upcoming shortage – rice rustling. While the shortage was taking over the world, rice was the commodity least affected. However the price of the ton of rice has gone from $400 mln to $760. Thai farmers now have to protect their crop with the guns against the thieves.

Governments in Asia taking all the measures to protect their 2.5 bn people from hunger and avoid food riots. Exports have been banned or diminished in order to keep food in the country. More production was encouraged, however the hopes are fading, as India has failed to become the rice exporter.

“The real danger with rising rice prices is that the ‘working poor’ will simply be pushed into the category of ‘poor’ who will look to us to feed them,” said Paul Risley, spokesman for WFP Asia. “There are hundreds of millions living at, or just below, the poverty line of $1-a-day, spending 70% of their day-labour wages on food.

As Amit Battacharaya writes from the New Delhi India has to focus on the internal food production with Thailand and Vietnam failing to provide much needed food imports. Era of the cheap food is over with the credit crunch so it is time to tighten the belts, author concludes.

Daily Reckoning has written a huge spread article to lead the reader to conclusion that the restriction of the rice exports will damage the markets and lead to the global inflation. However seriously it sounds, it is hard to agree with the point made by the magazine.

What causes inflation? Essentially it is a reciprocal process with each member of the economic system being responsible. Product producer sets a higher price to get more profit, retailer adds his markup and passes it over to the customer. Customer now need more money in order to buy other products, so he demands a higher salary for the same amount of labour. Higher salary has to be paid for by the clients of the company, so again producer has to increase the product price. This is an oversimplified example, which however illustrates the point.

Inflation can be tackled by increasing productivity – if you want to get more, you have to produce more. In the economical system you need money to start production, as you have to buy raw matherials, pay salaries and have other expenses. By paying salaries you create new customers for the market, as people have to buy in order to live in the society. Here we come to the point made by the Daily Reckoning.

We live in the world economy today. There is always a chance that the product can be produced in the country A cheaper than in the country B. Country A can then come to the market of the country B and sell its product cheaper, while still making a profit. Country B has to wrap the production of the product as it is not competitive anymore. Therefore businesses have to fire people thus diminishing the number of the clients on the market.

There is another upside to this – food security. In case with rice it is vital to ensure there is always enough of it for the market. If country A controls 50% of the rice market of the country B, it is hard to see how people are going to get along if A fails to produce enough rice one year.

This is all for today! Have a good appetite:)

March 31, 2008 Posted by | Uncategorized | , , , | Leave a comment

Grain prices soar globally. World food crisis. Axis of Logic asks, “Why?”

 By Daniel Ten Kate; commentary by Les Blough, Editor
Mar 29, 2008, 20:51

Editor’s Comment: It’s interesting to note how “analysts” quoted in this Christian Science Monitor article, attempt to blunt the crisis by telling us that food shortages aren’t as bad as they seem – not as bad as they have been in the past. Moreover, they provide a 3-fold explanation for the current food crisis:
“These factors, combined with a falling US dollar, steadily rising demand from developing countries, and biofuel policies that mop up excess cereal production, have all helped boost world prices.”
Biofuel policies that “mop up excess cereal production”? If only “excess” grains are used to make fuel for cars, how are they contributing to a food shortage? CSM also blames “Surging oil prices (in turn, boosting fertilizer and transport costs) combined with a drop in production due to droughts in Australia and the Ukraine have helped to drain global food stocks.”
This corporate media rendition bears part of the truth, but without context. We must ask, “Why is the dollar falling? … Why are oil prices surging? They also throw in honorable mention for blame to “droughts in Australia and the Ukraine”, but we won’t go there and begin talking about global warming.
Who are “those who want to make an easy buck” in CSM’s vague suggestion that local officials in various countries are culpable for the shortages as they profit when their fellow countrymen go hungry. Nowhere in this corporate media article is the blame laid at the feet of the capitalist speculators on the price of grain and the price of oil who bear utmost responsibility for food prices and shortages around the world. The time has long passed for a hard look at the system: Capitalism.
“Capitalism is an inherently distorted system that will always foster hunger, poverty and deprivation. The general structure of capitalism perpetually reproduces misery, and this is particularly the case with the current neo-liberal phase of capitalism.”
– José Vicente Rangel, former
Venezuelan Vice-President
“[Under capitalism], poverty, hunger, the destruction of the peoples of the land and the destruction of the environment have increased in the world.”
– Raúl Castro
President of Cuba
And as President Hugo Chavez Frias stated of Venezuela:
“within the limits of capitalism, the problems of misery, poverty and inequality that Venezuelans face, cannot be solved.”
– Les Blough, Editor


March 30, 2008 Posted by | Uncategorized | Leave a comment

Vietnam to cut rice exports this year

HANOI: Vietnam will cut rice exports this year in an effort to secure domestic supplies and stabilise skyrocketing food prices now driving double-digit inflation, the government said on Friday.

The communist government also cut its economic growth target to 7.5 percent for this year — down from last year’s 8.5 percent and an earlier target of up to nine percent for 2008 — and announced a 10-percent cut in public spending.

Prime Minister Nguyen Tan Dung has capped exports of the staple grain rice at 3.5 million tonnes this year, down from a previous target of 4.5 million tonnes, said a statement on the government’s official website.

Vietnam is the world’s second largest rice exporter and its farmers have benefited from fast-rising grain prices on the international markets, but domestic consumers have suffered as prices have shot up. Amid low global stocks and high prices, the Philippines has secured a commitment from Vietnam for 1.5 million tonnes of rice this year, barring natural disasters or unexpected harvest losses, its agriculture ministry said.

Inflation in Vietnam has topped 16 percent in the first quarter, government data showed this week, in a trend that has fuelled popular anger and an ongoing spate of labour strikes in the country of 86 million people.

Vietnam’s government, in a top-level meeting on fighting inflation and other economic woes, decided to freeze prices of 10 essential goods until June, also including electricity, coal and retail fuel, the website said.

The Vietnam Food Association has tightened rules on rice export contracts, telling exporters they must not exceed the average of the past two years. “The regulation aims to find a better balance between production and exports, so as to balance local prices and guarantee food security,” said Huynh Minh Hue, deputy general secretary of the association.

In the first quarter of 2008, Vietnam exported 859,000 tonnes of rice worth 366 million dollars, up 5.3 percent in quantity and 42.6 percent in value, according to the state-run General Statistics Office.

The government meeting this week also discussed Vietnam’s other economic challenges — including a widening trade deficit, a falling stock market, and lower growth projections for the year.

“We are facing quite a bad situation,” said Deputy Prime Minister Nguyen Sinh Hung, according to news website VNExpress. “The world economy is declining, but we have to be calm.” Hung said the government will require ministries and agencies to economise, cutting about 10 percent of regular spending, the report said.

“These economic difficulties will last for about one year and we have to accept high inflation levels … In the current situation I think reaching economic growth of 7.5 percent for the year would be high.” afp


March 30, 2008 Posted by | Uncategorized | Leave a comment