From Guardian (UK):
“WFP officials say the extraordinary increases in the global price of basic foods were caused by a “perfect storm” of factors: a rise in demand for animal feed from increasingly prosperous populations in India and China, the use of more land and agricultural produce for biofuels, and climate change…. Food riots have broken out in Morocco, Yemen, Mexico, Guinea, Mauritania, Senegal and Uzbekistan. Pakistan has reintroduced rationing for the first time in two decades. Russia has frozen the price of milk, bread, eggs and cooking oil for six months. Thailand is also planning a freeze on food staples. After protests around Indonesia, Jakarta has increased public food subsidies. India has banned the export of rice except the high-quality basmati variety.”
Let me encourage you to go read the Guardian piece. Had you heard about the food riots going on in poorer countries?
Much of the blame has been put on the transfer of land and grains to the production of biofuel. But its impact has been outweighed by the sharp growth in demand from a new middle class in China and India for meat and other foods, which were previously viewed as luxuries.
“The fundamental cause is high income growth,” said Joachim von Braun, the head of the International Food Policy Research Institute. “I estimate this is half the story. The biofuels is another 30%. Then there are weather-induced erratic changes which caused irritation in world food markets. These things have eaten into world levels of grain storage.
“The lower the reserves, the more nervous the markets become, and the increased volatility is particularly detrimental to the poor who have small assets.”
Did you know that 1/3 of US corn production is going to biofuels already? And that our grain reserves (wheat, corn, soy) are at their lowest level since the 1970s?
The Guardian article has this astonishing content regarding food riots, food prices, and impacts:
Global impact: Where inflation bites deepest
1 United States The last time America’s grain silos were so empty was in the early seventies, when the Soviet Union bought much of the harvest. Washington is telling the World Food Programme it is facing a 40% increase in food commodity prices compared with last year, and higher fuel bills to transport it, so the US, the biggest single food aid contributor, will radically cut the amount it gives away.
2 Morocco 34 people jailed this month for taking part in riots over food prices.
3 Egypt The world’s largest importer of wheat has been hard hit by the global price rises, and most of the increase will be absorbed in increased subsidies. The government has also had to relax the rules on who is eligible for food aid, adding an extra 10.5 million people.
4 Eritrea It could be one of the states hardest hit in Africa because of its reliance on imports. The price rises will hit urban populations not previously thought vulnerable to a lack of food.
5 Zimbabwe With annual inflation of 100,000% and unemployment at 80%, price increases on staples can only worsen the severe food shortages.
6 Yemen Prices of bread and other staples have nearly doubled in the past four months, sparking riots in which at least a dozen people were killed.
7 Russia The government struck a deal with producers last year to freeze the price of milk, eggs, vegetable oil, bread and kefir (a fermented milk drink). The freeze was due to last until the end of January but was extended for another three months.
8 Afghanistan President Hamid Karzai has asked the WFP to feed an extra 2.5 million people, who are now in danger of malnutrition as a result of a harsh winter and the effect of high world prices in a country that is heavily dependent on imports.
9 Pakistan President Pervez Musharraf announced this month that Pakistan would be going back to ration cards for the first time since the 1980s, after the sharp increase in the price of staples. These will help the poor (nearly half the population) buy subsidised flour, wheat, sugar, pulses and cooking fat from state-owned outlets.
10 India The government will spend 250bn rupees on food security. India is the world’s second biggest wheat producer but bought 5.5m tonnes in 2006, and 1.8m tonnes last year, driving up world prices. It has banned the export of all forms of rice other than luxury basmati.
11 China Unusually severe blizzards have dramatically cut agricultural production and sent prices for food staples soaring. The overall food inflation rate is 18.2%. The cost of pork has increased by more than half. The cost of food was rising fast even before the bad weather moved in, as an increasingly prosperous population began to demand as staples agricultural products previously seen as luxuries. The government has increased taxes and imposed quotas on food exports, while removing duties on food imports.
12 Thailand The government is planning to freeze prices of rice, cooking oil and noodles.
13 Malaysia and the Philippines Malaysia is planning strategic stockpiles of the country’s staples. Meanwhile the Philippines has made an unusual plea to Vietnam to guarantee its rice supplies. Imports were previously left to the global market.
14 Indonesia Food price rises have triggered protests and the government has had to increase its food subsidies by over a third to contain public anger.
There’s lots more to read — go read it. Why is it only non-US news sources that report on this stuff? Criminy — a 40% increase in food commodity prices over last year?