Up, up, away
Oil prices have shot up again. Internationally, oil prices have tripled since 2006 and food prices doubled.
In this grim scenario, an expert in the US Congressional Research Service has listed five factors for the increase of global food prices:
1. Weather: Droughts in Australia and Eastern Europe and poor weather in Canada, Western Europe and Ukraine resulting in reduced supplies of grain. Global stocks of corn, wheat and soybeans are at historically low levels.
2. Export restrictions: Grain export restrictions by some countries to augment domestic supplies and hopefully contain the effects of high prices on their own consumers. India has imposed tight restrictions on non-basmati rice exports, and Vietnam banned exports of rice. Thailand, the world's biggest rice exporter, is expected to export a record amount this year as prices rise to unprecedented levels. The price of Thai rice has tripled since January and now stands above $1,000 a ton.
3. Rising oil and energy prices: This has affected all levels of the food production and marketing chain, from fertilizer costs to harvesting, transporting and processing food.
4. Higher incomes: In emerging markets like China and India, this has resulted in strong demand for food commodities, meat and processed foods and higher prices in world markets. Both these countries are increasing their consumption of meat, and they need corn and other feed grains. It takes 7 kilos of grain to produce 1 kilo of meat. China, once a major grain exporter, has become an importer of grain.
5. Increased demand for biofuels: This has reduced the availability of agricultural products for food and feed use.
Do you think there are more reasons, globally and specific to India or Asia, that are triggering this trend?
Comments
1. Earlier, 75-80% of the population were into agriculture and the rest 25% lived comfortably. Today it is other way around.
2. Everyone wants tasty rice and shiny wheat. We have forgotten our traditional home grains. Like in India, millet and sorghum have rarely been on our dishes for past 10 years.
3. When we import nice food, we obviously need oil to transport it. This is a side effect of globalisation.
I still remember about 2-3 years ago, I paid only US$2 for a 5 KG bag of rice here in Thailand. Today the price is $6.5.
Soon we have to give up our luxury and go back to village to live a peaceful, happy life. Please see the people in Vanuatu in the link below.
http://news.bbc.co.uk/2/hi/programmes/from_our_own_correspondent/7427768.stm
Posted by: Seenivasan | June 4, 2008 04:51 PM
5th one is the main reason for the current price hike... developed countries have converted almost 30% of agricultural lands for bio-fuel cultivation and they have forced developing countries like Thailand to convert over 70% agricultural lands to bio-fuel cultivation.
Posted by: arjun | June 7, 2008 03:25 PM