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Feed the world? We are fighting a losing battle, UN admits
Julian Borger, The Guardian
he United Nations warned yesterday that it no longer has enough money to keep global malnutrition at bay this year in the face of a dramatic upward surge in world commodity prices, which have created a “new face of hunger”.
“We will have a problem in coming months,” said Josette Sheeran, the head of the UN’s World Food Programme (WFP). “We will have a significant gap if commodity prices remain this high, and we will need an extra half billion dollars just to meet existing assessed needs.”
With voluntary contributions from the world’s wealthy nations, the WFP feeds 73 million people in 78 countries, less than a 10th of the total number of the world’s undernourished. Its agreed budget for 2008 was $2.9bn (£1.5bn). But with annual food price increases around the world of up to 40% and dramatic hikes in fuel costs, that budget is no longer enough even to maintain current food deliveries.
The shortfall is all the more worrying as it comes at a time when populations, many in urban areas, who had thought themselves secure in their food supply are now unable to afford basic foodstuffs. Afghanistan has recently added an extra 2.5 million people to the number it says are at risk of malnutrition
(26 February 2008)
CHINA: Staring At Grain Imports
Antoaneta Bezlova, IPS
With global food prices on an upward spiral, China is facing renewed fears that its growing demand for grain to feed the world’s largest population may lead to imports from international markets, driving prices higher and spurring further food inflation.
The resurging “threat of China’s food security” may have induced more fatigue than alarm if it was not coming at a time of unprecedented scarcity of arable land, which is increasingly being converted to grow biofuels, and because of fresh challenges posed by global warming.
With its natural constraints — it has to feed a fifth of the world’s population with less than one-seventh of the global farmland — and its surging demand, China finds itself in the middle of a raucous debate about the future of global food security.
(26 February 2008)
Venezuela limits food exports
VENEZUELA will halt exports of foods such as milk and meat unless domestic demand is met first, the government said today, as leftist president Hugo Chavez struggles with shortages of staple products.
Venezuelan shoppers have for months faced shortages of basics such as milk and chicken, a problem the government blames on growing demand and hoarding but business leaders say stems from price controls that do not keep pace with high inflation.
(26 February 2008)
Contributor Jeffrey J. Brown writes:
Whether it is food or energy, food and energy exporters tend to take care of the home team first.
It is increasingly apparent that this is not a good time to be both a large food and energy importer.
America’s grain stocks running short
Robert Pore, The Grand Island Independent (Nebraska)
Global demand for grain and oilseeds is at record levels, causing the nation’s grain stocks to reach critically low levels, according to Purdue University agricultural economist Chris Hurt.
With a weak U.S. dollar and global demand so high, foreign buyers are outbidding domestic buyers for American grain, Hurt said.
“Food consumers worldwide are going to have to pay more,” Hurt said. “We ended 2007 with our monthly inflation rate on food nearly 5 percent higher. I think we’ll see times in 2008 where the food inflation rate might be as much as 6 percent.”
Increasing food costs will ignite the debate on food security this year, Hurt said.
“We’ll have discussions about whether we should allow the foreign sector to buy our food,” he said. “Is food a strategic item that we need to keep in our country?”
(24 February 2008)
Heated crop prices spark supply fears
Joshua Boak, Chicago Tribune
It’s a stand-off between fuel, foreign trade and American stomachs.
The government on Thursday predicted an unprecedented jump in the export of agricultural goods, while demand for corn-based ethanol continues to push prices for soybeans and wheat to new records.
The rising cost of food has bakers marching on Washington, shaped the Democratic presidential primary’s debate about international trade and provoked questions about whether America can continue to be the world’s breadbasket.
(25 February 2008)
Although we don’t usually link to financial newsletters, Joseph Darcy at Market Oracle has a good round-up of the food situation: Experts: Global Food Shortages Could ‘Continue for Decades’.
In Price and Supply, Wheat Is the Unstable Staple
David Streitfeld, New York Times
For decades, wheat was a commodity no American needed to think much about, except the farmers who grew it. The grain was usually plentiful and prices were low.
All of a sudden, those assumptions have been turned upside down. With demand soaring abroad and droughts crimping supply, the world’s wheat stockpiles have fallen to their lowest level in 30 years, and stocks in the United States have dropped to levels unseen since 1948.
Prices have been gyrating in recent days as traders tried to figure out what to make of the situation.
(13 February 2008)
Smithfield Cutting US Hog Breeding, Citing Grain Cost
Dow Jones via CNN Money
Pork processor Smithfield Foods (SFD) said Tuesday it is reducing its U.S. breeding herd by 4% to 5%, or 40,000 to 50,000 sows, because of rising grain costs.
That means Smithfield ultimately will produce 800,000 to 1 million fewer market hogs annually, the company said. Smithfield currently raises 18 million market hogs a year.
“Given the economics for raising hogs today, we cannot continue on the current path; something has to change,” Smithfield Chief executive C. Larry Pope said.
Grain costs continue at record levels and have the potential to escalate, ” given the current U.S. government policy favoring corn for ethanol,” Pope said
(19 February 2008)