Wednesday, April 30, 2008

Food Inflation Watch: The Washington Post Global Food Crisis series

I thought of blogging this one two days ago but could not do so due to busy internship work schedule and other stuff happening in D.C.

The Washington Post has been been publishing a series of articles related to the food crisis. It is very comprehensive, analytical, and informative.

The New Economics of Hunger:

On the usual list of the demand-push factors for driving up prices add this one as well: "Food was becoming the new gold. Investors fleeing Wall Street's mortgage-related strife plowed hundreds of millions of dollars into grain futures, driving prices up even more." is outpacing even the Soviet grain emergency of 1972-75, when world food prices rose 78 percent. By comparison, from the beginning of 2005 to early 2008, prices leapt 80 percent, according to the United Nations' Food and Agriculture Organization. Much of the increase is being absorbed by middle men -- distributors, processors, even governments -- but consumers worldwide are still feeling the pinch.

...A big reason for higher wheat prices, for instance, is the multiyear drought in Australia, something that scientists say may become persistent because of global warming. But wheat prices are also rising because U.S. farmers have been planting less of it, or moving wheat to less fertile ground. That is partly because they are planting more corn to capitalize on the biofuel frenzy.