The United Nations Organization sees signs in the current situation in world food markets that point towards a possible repeat of the world food crisis in 2007 and 2008, when prices of staple foods skyrocketed, creating instability which led to huge social upheavals. Measures are needed in the short, medium and long term, state experts from the UN.
The directors of three United Nations food and agriculture agencies issued a joint statement on September 4 warning against a looming food crisis which has the hallmarks of the 2007 and 2008 food crisis which saw prices of staple products spike, having enormous social and political consequences.
José Graziano da Silva, the Director-General of the UN Food and Agriculture Organization, Ertharin Courins, Executive Director of the UN World Food Programme and Kanayo F. Nwanze, President of the International Fund for Agricultural Development, stated “The current situation in world food markets, characterised by sharp increases in maize, wheat and soybean prices, has raised fears of a repeat of the 2007-2008 world food crisis”.
“The market is very vulnerable to any supply side shocks… there is a risk of more price increases but at the moment there is no evidence to suggest that is an inevitability,” he told a news conference.
The FAO said this week that swift international action could still prevent a catastrophe from developing. It has urged countries to review their biofuel mandates and also warned against panic buying and restrictions on exports.
Jill Michal: ‘The reason so many people fall off the edge in a tough economy is that they’re standing way too close to it, and I think this is a perfect demonstration of that.’
40 Percent Of Americans Have $500 Or Less In Savings
A survey of about 1,100 Americans finds that more than 4-in-10 respondents admit they don’t have more than $500 in readily accessible savings.
The survey is a kind of departure forCreditDonkey.com, a website that compares credit card deals. Not respondents all were poor. Some had big houses, big mortgages or 401(k)s, but still no more than five Benjamins to rub together right now.
Jill Michal, president and CEO of the United Way of Greater Philadelphia and Southern New Jersey, reacts to the lack of liquid assets.
“It doesn’t shock me, but it does scare me. You know, we often say that the reason so many people fall off the edge in a tough economy is that they’re standing way too close to it, and I think this is a perfect demonstration of that.”
Retail-milk prices will rise as much as 15 percent by the first quarter of 2013 after the worst U.S. drought since 1956 sent livestock-feed costs to a record, according to Dairy Management Inc., an industry group.
“Since the drought started, the milk price has gone up quite a bit,” Dairy Management Chief Executive Officer Tom Gallagher said yesterday during an interview in Chicago. “Prices are going to go up worldwide.”
Milk futures in Chicago touched $21.26 per 100 pounds on Oct. 3, a 13-month high.
“When you get to $25 milk, if that happens, the effect on the retail price is enormous,” Gallagher said. Consumers paid on average $3.469 a gallon in September, U.S. Bureau of Labor Statistics data show.
“We know that it will really hurt sales,” Gallagher said. “Food insecurity, particularly in the poorer countries, that’s a big deal. There’s a fair amount of supply worldwide, but you’re still going to have people hurt in different countries.”
Supply growth is constrained by export controls recently implemented by many large grain producing countries, drought in several producing regions, and the lack of readily available acreage suitable for expanding farming operations. Western agriculture methods are also incredibly energy intensive, which increases the cost of expanding supplies. The following developments occurred in the sector last month:
? The collapse of Australia’s rice production is one of several factors contributing to a doubling of rice prices in the last three months. Six long years of drought have taken a toll, reducing Australia’s rice crop by 98 percent. Price increases have led the world’s largest exporters to restrict exports, spurred panicked hoarding in Hong Kong and the Philippines, and set off violent protests in countries including Cameroon, Egypt, Ethiopia, Haiti, Indonesia, Italy, Ivory Coast, Mauritania, the Philippines, Thailand, Uzbekistan and Yemen. (New York Times)
? The International Rice Research Institute (IRRI) issued a forecast that rice prices will keep rising as demand for the staple is outstripping production. The Philippines-based body said that more research was needed in how to increase rice productivity. The price of rice has risen by as much as 70% during the past year, with increases accelerating in recent weeks. (BBC News)
? U.S. restaurants and other large-scale customers are buying so much rice that Costco, Sam’s Club and other wholesalers have put limits on the amounts they sell. This has resulted in some individual stores in places like California reportedly running out of rice. The supply problems with flour and rice are connected to dramatic price increases tied to global shifts in the commodity markets, where prices of corn, wheat, rice and soybeans have hit record levels. A rise in rice prices has led to restaurants and other big users stocking up to avoid future hikes, thus upsetting the supply chain. (Chicago Tribune)