Rising Food Prices Foreshadow Global Shortages

November 07, 2007 03:36 PM
by findingDulcinea Staff
In response to the increasing expense of staple foodstuffs, developing countries resort to price restrictions and import regulations. As oil prices rise, can modern farming practices be sustained?

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Adverse weather conditions and crop diseases have pushed up the cost of essential edibles, such as meat, grains, eggs and vegetable oils, in many parts of the world.

However, analysts have pointed to the rising price of oil as the chief problem. More expensive fuel translates into steeper shipping rates, costlier hydrocarbon-based products (such as fertilizers and pesticides) and higher prices for food processing.

In addition, American corn farmers are allotting a greater proportion of their crop to ethanol production. Although this alleviates domestic oil prices somewhat, it pushes up the cost of corn, a staple in the diets of nations the world over.

“Booming ethanol production has already raised U.S. food prices by $47 per person annually,” Popular Science magazine reports.

Sharp increases in corn prices sparked riots in Mexico in January, and food costs in Western Europe increased 6 percent over 2006–07, outpacing inflation.

Developing economies stand to lose most. These countries rely on imports to sustain themselves, and on average their citizens spend a larger percentage of their wages on food than do their counterparts in developed nations.

“China has already seen a 20 percent price increase over the past 12 months for some staple goods, and in India, the overall food price index has gone up 10 percent from the past year,” writes London-based daily newspaper The Independent.

Jacques Diouf, director-general of the U.N. Food and Agriculture Organization sees dark times ahead for struggling economies, according to the Financial Times. In October this year, Diouf said, “If prices continue to rise, I would not be surprised if we began to see food riots.”

Headline: Global food production falls short

Opinion & Analysis: Are we facing the end of cheap food?

Reference Material: The outlook on food security


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