10 January 2011 By Markaz Kavkaz The coming hunger: Record food prices put world 'in
danger', says UN. A combination of unfavorable circumstance, alleged
climate changes and high oil prices make world
dangerous, claim organizations, referred to by The
Independent which published an article about an
impending danger of famine. Food riots, geopolitical tensions, global inflation
and increasing hunger among the planet's poorest
people are the likely effects of a new surge in world
food prices, which have hit an all-time high according
to the United Nations. The UN's index of food prices - an international
basket comprising wheat, corn, dairy produce, meat and
sugar - stands at its highest since the index started
in 1990, surpassing even the peaks seen during the
2008 food crisis, which prompted civil disturbances
from Mexico to Indonesia. "We are entering danger territory," said the UN
Food and Agriculture Organization's chief economist,
Abdolreza Abbassian. Global food prices have risen for the sixth month
in succession. Wheat has almost doubled since June,
sugar is at a 30-year high, and pork is up by a
quarter since the beginning of 2010. The trends have already affected the UK where the
jump in food prices in November was the highest since
1976. Meat and poultry were up 1 per cent and fruit by
7.5 per cent in one month. Food producers have been told to expect the wheat
price to jump again this month, hitting bakers and the
makers of everything from pasta to biscuits. More is sure to follow and that in turn will add to
pressure on the Bank of England to raise interest
rates to control rising prices. Higher mortgage bills
by the end of the year will add to the unpleasantness
facing "middle England" from a year of tax hikes and
below-inflation pay rises. However, the biggest impact of the food price shock
will be felt in countries in the developing world
where staple items command a much larger share of
household incomes. Economists warn that "soft commodity" food prices
show little sign of stabilizing, and that cereals and
sugar in particular may surge even higher in coming
months. In addition, long-term trends associated with
growth in population and climate change may mean
higher food costs become a permanent feature of
economic life, even though the current spike may end
in due course. Speculation, too, may be part of the
crisis, as investors climb on to the rising food-price
bandwagon. Mr Abbassian said the UN agency is concerned by the
unpredictability of weather activity, which many
experts link to climate change. He said: "There is
still room for prices to go up much higher, if for
example the dry conditions in Argentina tend to become
a drought, and if we start having problems with
winterkill in the northern hemisphere for the wheat
crops." One concern, especially in Ukraine and Russia, is
that the cold winter, following disastrous droughts
and summer fires, will have damaged the seeds for next
year's crops, leading to an even more acute crisis
than seen last year. Government policies, especially
the export bans imposed by nervous Indian and Russian
governments, have exacerbated such problems in world
markets. Meanwhile, burgeoning consumption in the booming
economies of east Asia and the pressure exerted by the
demand for crops for biofuels rather than food,
especially in the US, is adding to the unprecedented
squeeze on world food supplies. The latest surge in crude oil prices adds to the
risk of turmoil. Many experts say oil prices show few
signs of abating, and the price of a barrel is set to
breach the 0 barrier again soon. Opec officials
yesterday said they were happy with such a level. Oil
peaked at just under 0 a barrel in 2008; any sign of
renewed tension in Iran would see the price exceed
that. Higher oil prices add to food price inflation by
increasing transportation costs. The interplay of rising fuel prices, the growing
use of biofuels, bad weather and soaring futures
markets drove up the price of food dramatically in
2008, prompting violent protests in Mexico, Indonesia,
Egypt, Cameroon and Haiti. Last year's spike was
provoked mainly by the freakish weather conditions in
Russia and Ukraine, but one of the underlying trends
is the growing and changing appetites of east Asia.
As more Chinese enter the middle classes they tend
to consume more poultry and meat, just as Westerners
did at a similar stage in their economic progress.
However, meat and poultry husbandry consumes at least
three times the resources that grains do, while the
drift towards the cities in China is reducing the
yields of its farms. Similar trends are visible in the
other fast-growing, populous nations such as Brazil,
India and Indonesia. Countries that are poor and produce relatively
little of their own food are most vulnerable to the
food price shock - Bangladesh, Morocco and Nigeria top
the "at risk" list, according to research by Nomura
economists, who also identify growing shortages of
water as a critical factor restraining any growth in
agricultural productivity. Owen Job, strategist at Nomura, said: "The
economists' model of increasing supply as demand grows
may be breaking down. Supply cannot keep up with
factors such as biofuels and the urbanization of
China. Some 30 per cent of all water used in
agriculture comes from unsustainable sources." * David Cameron has disclosed that the Treasury was
considering introducing a "fuel stabilizer". Under the
move, tax paid by motorists would be cut when the cost
of oil surged worldwide and rise when it dropped. He
said: "We are looking at it. It's not simple but I
would like to try and find some way of sharing the
risk of higher fuel prices with the consumer." Comments 💬 التعليقات |