Food & agriculture – Nov 22

November 22, 2010

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Phosphate: Morocco’s White Gold

Brendan Borrell and Daniel Grushkin, Business Week
Phosphate is used in everything from fertilizer to rechargeable batteries. And Morocco’s King Mohammed VI has cornered the market

… Miners have been working in Khouribga [Morocco] for almost a century, but only now is the area poised to become central to the global economy. … The phosphate extracted from the rock, used in fertilizer, detergent, food additives, and more recently lithium-ion batteries, sold for decades in its raw state for less than $40 per metric ton. Those days are gone. It’s currently trading at about $130.

This is good news for King Mohammed VI, 47, who owns more than half the world’s phosphate reserves. James Prokopanko, chief executive officer of Plymouth (Minn.)-based fertilizer giant Mosaic (MOS), has called Morocco the Saudi Arabia of phosphate, with all that implies about the King’s power to influence prices and economies. Mohammed’s strategy, by most accounts, is to drive the commodity’s price higher yet—which means the cost of making everything from corn syrup to iPads will be going up as well.

… Phosphate, when used as fertilizer, is the irreplaceable engine powering modern agriculture, and its reserves are in decline almost everywhere except Morocco. Most phosphate mines, including those in the U.S., which produces 17 percent of the global supply, have been in a downward spiral for the last decade, running out of quality rock and hindered by environmental regulation. That has forced companies to look farther afield for additional supplies. …

Even a temporary phosphate shortage could affect a range of U.S. industries. Phosphate fertilizer is used on just about every crop, though most in the U.S. goes to the 13 billion bushels of corn grown each year to make everything from corn syrup to cattle feed to ethanol. When prices climbed tenfold in 2007 and 2008, retailers and farmers scrambled to build local fertilizer warehouses as a buffer. … The prospect of a shortage has become serious enough that the Office of Intelligence and Counterintelligence at the U.S. Energy Dept. recently assigned an analyst to study the issue; she was not permitted to speak publicly because of “geopolitical sensitivities.”

… Western Sahara is a disputed territory. It’s also where Morocco’s best phosphate lies. The region known to the King as “Moroccan Sahara” begins just south of the fishing village of Tarfaya on the Atlantic coast. The U.N. calls it “the non-self-governing territory of Western Sahara” and deems it “occupied.” It’s a place where phosphate rumbles to the coast on the world’s longest conveyor belt, while tanks and soldiers roam alongside, defending the shipments from Sahrawi separatists.

When Spain withdrew from Morocco in 1975, some 350,000 Moroccans marched into Western Sahara with tents on their backs. The native Sahrawi fought back for 16 years under the leadership of the Algerian-backed Polisario rebels, signing a cease-fire in 1991. The U.N. continues to monitor the agreement with 215 uniformed peacekeepers, but a planned vote on self-determination has been repeatedly delayed. Today, approximately 90,000 Sahrawi live in refugee camps in Algeria, separated from their families in Moroccan-controlled territory by a 1,400-mile-long berm dotted with land mines.
(4 November 2010)
Thanks to EB contibutor John Gear. -BA


The World Food Crisis: Causes and Solutions (Peter Rosset talk)

Peter Rosset, Climate and Capitalism

Video: Peter Rosset presents the Food Sovereignty vision defended by La Via Campesina

Dr. Peter Rosset is based in Oaxaca, Mexico, where he is a researcher at the Centro de Estudios para el Cambio en el Campo Mexicano (Center of Studies for Rural Change in Mexico), and co-coordinator of the Land Research Action Network. He is the former co-director of Food First/The Institute for Food and Development Policy in Oakland, California.

“The World Food Crisis: Causes and Solutions” by Peter Rosset from MHC MCGI on Vimeo.

(13 November 2010)


Food prices may rise by up to 20%, warns UN

John Vidal, Guardian
The UN today warned that food prices could rise by 10%-20% next year after poor harvests and an expected rundown of global reserves. More than 70 African and Asian countries will be the worst hit, said the Food and Agricultural Organisation in its monthly report.

In its gloomiest forecast since the 2007/08 food crisis, which saw food riots in more than 25 countries and 100 million extra hungry people, the report’s authors urged states to prepare for hardship.

“Countries must remain vigilant against supply shocks,” the report warned. “Consumers may have little choice but to pay higher prices for their food. The size of next year’s harvest becomes increasingly critical. For stocks to be replenished and prices to return to more normal levels, large production expansions are needed in 2011.”

Prices of wheat, maize and many other foods traded internationally have risen by up to 40% in just a few months. Sugar, butter and cassava prices are at 30-year highs, and meat and fish are both significantly more expensive than last year.

Food price inflation – fuelled by price speculation, the searing heatwave in Russia in the summer and heavy trading on futures markets – is now running at up to 15% a year in some countries.
(17 November 2010)


Climate Change and Disease Will Spark New Food Crisis, Says UN

Sean O’Grady, Independent/UK
A food crisis could overtake the world in 2011, according to the Food and Agriculture Organisation, an agency of the United Nations.

A food crisis could overtake the world in 2011, according to the Food and Agriculture Organisation, an agency of the United Nations.

Climate change, speculation, competing uses such as biofuels and soaring demand from emerging markets in East Asia are the factors that will push global food prices sharply higher next year, claims the FAO.

The FAO warns the world to “be prepared” for more price hikes and volatility if production and stocks do not respond. Price hikes of 41 per cent in wheat, 47 per cent in maize and a third in sugar are foreseen by the FAO. The last time that happened it sparked riots from Mexico to Indonesia.

In its latest Food Outlook the FAO says that the prices of many staple crops will rise by up to half next year, with many returning to the peaks seen during the food crisis of 2008, or even exceeding them in some cases. Apart from driving inflation higher in Britain and the rest of the Western world, another bout of food price hyperinflation has grim implications for the poorest people on the planet, even now hardly able to afford to feed themselves.
(18 November 2010)


Tags: Food, Resource Depletion