Food & agriculture - Oct 24
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Bread and butter issue: Rising prices may herald the first global food shortage since the 1970s
Jenny Wiggins and Javier Blas, Financial Times
When the United Nations held its annual World Food Day last week to publicise the plight of the 854m malnourished people around the world, its warning that there “are still too many hungry people” was a little more anxious than usual.
Finding food to feed the hungry is becoming an increasingly difficult task as growing demand for staples such as wheat, corn and rice brings higher prices. That is leading all nations - rich and poor - to compete for food supplies.
Food security is not a new concern for countries that have battled political instability, droughts or wars. But for the first time since the early 1970s, when there were global food shortages, it is starting to concern more stable nations as well. “The whole global picture is flagging up signals that we’re moving out of a period of abundant food supply into a period in which food is going to be in much shorter supply,” says Henry Fell, chairman of Britain’s Commercial Farmers Group.
As agricultural commodities trade at record high levels, causing one food manufacturer after another to put up prices - Danone, the French dairy group, this month became the latest to reflect the severity of the cost increases when it said it would increase prices by 10 per cent - countries are starting to question whether they can afford to keep feeding themselves.
Wheat and milk prices have surged to all-time highs while those for corn and soyabeans stand at well above their 1990s averages. Rice and coffee have jumped to 10-year records and meat prices have risen recently by up to 50 per cent in some countries.
“The world is gradually losing the buffer that it used to have to protect against big swings [in the market],” says Abdolreza Abbassian, secretary of the grains trading group at the UN’s Food and Agriculture Organisation. “There is a sense of panic.”
(23 October 2007)
Grain price hikes set to continue
Fu Jing, China Daily
Grain prices will continue to edge upwards next year despite a turbulent 12 months in which costs soared, according to a leading agricultural policy maker.
The surging cost of oil, production material and fertilizer will make it increasingly difficult for the government to curb hikes generated by rising food prices since last year.
"Rising oil prices will be boosting costs for the agricultural sector and the price hike trend will continue next year," Chen Xiwen, deputy director of the Office of the Central Leading Group on Financial and Economic Affairs, told China Daily Sunday.
Chen made the forecast despite news from the Minister of Agriculture Sun Zhengcai last week that China would record a fourth consecutive bumper food harvest and an output of 500 million tons, a target originally set for 2010 by the National People's Congress, China's parliament.
"The grain supply can be guaranteed but the prices will go higher driven by growing cost," said Chen, who is also director of the Office of the Central Leading Group on Agricultural Affairs.
Production materials and fertilizer costs increased by a year-on-year average of 17 percent during the first nine months of 2007.
Chen said rising oil prices, after reaching a record high of about $90 a barrel last week, would continue to drive up costs for the agricultural sectors.
(22 October 2007)
Wheat Rises for Fourth Day as Importers Seek Supplies; Corn Up
Jae Hur and Danielle Rossingh, Bloomberg
Wheat futures in Chicago gained for a fourth day as buyers, including South Korea and Japan, sought to import the grain amid tight global supplies. Corn and soybean futures advanced.
Japan is seeking to buy a total of 48,800 metric tons of wheat this week and South Korea bought 25,000 tons in a tender today. Wheat prices reached a record last month after bad weather damaged crops from Canada to Australia.
``The tender news lent support to the wheat market, which has been experiencing tight supplies,'' said Chikako Inoue, an analyst at brokerage Taiheiyo Bussan in Tokyo.
(23 October 2007)
Contributor Devlin Buckley writes: See chart...
Jim Rogers Shifts Assets Out of Dollar to Buy Yuan (and looks to agriculture)
Marcel van de Hoef and Danielle Rossingh, Bloomberg
Jim Rogers, chairman of Beeland Interests Inc., said he is shifting all his assets out of the dollar and buying Chinese yuan because the Federal Reserve has eroded the value of the U.S. currency.
``I'm in the process of -- I hope in the next few months -- getting all of my assets out of U.S. dollars,'' said Rogers, 65, who correctly predicted the commodities rally in 1999. ``I'm that pessimistic about what's happening in the U.S.''
... Commodity prices have surged as demand for raw materials, especially from China, rose faster than producers were able to increase output. Agricultural prices have led recent gains, including a record high for wheat last month and a three-year high in soybeans.
``The number of hectares devoted to wheat farming has been declining for 30 years, the inventory levels of food are at the lowest level since 1972,'' Rogers said. ``Suppose we start having droughts again. God knows how high the price of agriculture is going to go, so that's where I'm putting more of my money now than in other things.''
He added, ``I think I'm going to make more money in agriculture than I make in precious metals.''
Platinum, gold, silver and palladium will ``be much, much higher during the course of the bull market,'' he said.
(24 October 2007)
Pricier grain costs Africans dear
Kalay Maistry, Aljazeera
In Finetown, one of South Africa's poorest settlements, a group of women are trying to provide more than 1,500 children with three meals a day.
The settlement, which lies just south of Johannesburg, is beset by high unemployment and Aids.
Many of the children there already carry the disease and their parents are too poor to care for them properly.
With only about $130 a month to buy food, rising global grain prices due to increasing demand and a disappointing harvest, are making things even more difficult.
The price of basic food commodities such as wheat, rice and corn have risen around the globe and that price rise is affecting the levels of food aid.
In the last seven years, the US, which is the world's largest single food donor, has more than halved its donations to 2.4 million tonnes a year and many fear the downward spiral will continue.
But there are also other implications: the children in Finetown are not getting enough milk.
"Milk is very important, children need calcium, they need calcium in their bodies, especially many of our kids are sick, and they need the vitamins," Linda Tukula, one of the women caring for the children in Finetown, told Al Jazeera.
(21 October 2007)
China Turns to Dry Land Rice as Water Crisis Looms
Niu Shuping, Reuters
BEIJING - China, the world's top consumer and producer of rice, is turning to a new kind of rice that can grow on dry soil like wheat as the country faces a serious water shortage due to industrialisation and the global warming.
China, a pioneer in aerobic rice, plans to expand acreage for such rice to about 30 percent from about 1 percent now as the water shortage limits expansion of traditional water-flooded rice, or lowland rice, said Wang Huaqi, aerobic rice breeder at China Agricultural University.
Together with the International Rice Research Institute (IRRI), the university has been working on aerobic rice that is grown like an upland crop such as wheat and corn in soil which is not flooded or paddled.
Aerobic rice requires 50-70 percent less water, although its yields are about 30 percent less than hybrid rice -- a strain that brought about the Green Revolution in the 1960s, Wang told Reuters on the sidelines of a workshop in Beijing.
"Our objective is to help farmers cope with decreasing water availability. Water is getting scarce," said Bas Bouman, a senior scientist at IRRI.
(24 October 2007)
Australian drought pushes up price of beer
SYDNEY - A cold glass of beer is about to become more expensive in much of Australia, after prolonged drought wiped out much of the winter barley crop.
The price of other staples such as meat and bread will also rise by as much as 10 percent, New South Wales Primary Industries Minister Ian Macdonald said.
(13 October 2007)
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