Global food crisis looms as climate change and fuel shortages bite

[tambutsoo]

Global food crisis looms as climate change and fuel shortages bite

Soaring crop prices and demand for biofuels raise fears of political instability


Empty shelves in Caracas. Food riots in West Bengal and Mexico. Warnings of hunger in Jamaica, Nepal, the Philippines and sub-Saharan Africa. Soaring prices for basic foods are beginning to lead to political instability, with governments being forced to step in to artificially control the cost of bread, maize, rice and dairy products.

Record world prices for most staple foods have led to 18% food price inflation in China, 13% in Indonesia and Pakistan, and 10% or more in Latin America, Russia and India, according to the UN Food and Agricultural Organisation (FAO). Wheat has doubled in price, maize is nearly 50% higher than a year ago and rice is 20% more expensive, says the UN. Next week the FAO is expected to say that global food reserves are at their lowest in 25 years and that prices will remain high for years.

Last week the Kremlin forced Russian companies to freeze the price of milk, bread and other foods until January 31, for fear of a public backlash with a parliamentary election looming. "The price of goods has risen sharply and that has hit the poor particularly hard," said Oleg Savelyev, of the Levada Centre polling institute.

India, Yemen, Mexico, Burkina Faso and several other countries have had, or been close to, food riots in the last year, something not seen in decades of low global food commodity prices. Meanwhile, there are shortages of beef, chicken and milk in Venezuela and other countries as governments try to keep a lid on food price inflation.

Boycotts have become commonplace. Argentinians shunned tomatoes during the recent presidential election campaign when they became more expensive than meat. Italians organised a one-day boycott of pasta in protest at rising prices. German leftwing politicians have called for an increase in welfare benefits so that people can cope with price rises.

"If you combine the increase of the oil prices and the increase of food prices then you have the elements of a very serious [social] crisis in the future," said Jacques Diouf, head of the FAO, in London last week.

The price rises are a result of record oil prices, US farmers switching out of cereals to grow biofuel crops, extreme weather and growing demand from countries India and China, the UN said yesterday.

"There is no one cause but a lot of things are coming together to lead to this. It's hard to separate out the factors," said Ali Gurkan, head of the FAO's Food Outlook programme, yesterday.

He said cereal stocks had been declining for more than a decade but now stood at around 57 days, which made global food supplies vulnerable to an international crisis or big natural disaster such as a drought or flood.

"Any unforeseen flood or crisis can make prices rise very quickly. I do not think we should panic but we should be very careful about what may happen," he warned.

Lester Brown, founder of the Washington-based Worldwatch Institute thinktank, said: "The competition for grain between the world's 800 million motorists, who want to maintain their mobility, and its 2 billion poorest people, who are simply trying to survive, is emerging as an epic issue."

Last year, he said, US farmers distorted the world market for cereals by growing 14m tonnes, or 20% of the whole maize crop, for ethanol for vehicles. This took millions of hectares of land out of food production and nearly doubled the price of maize. Mr Bush this year called for steep rises in ethanol production as part of plans to reduce petrol demand by 20% by 2017.

Maize is a staple food in many countries which import from the US, including Japan, Egypt, and Mexico. US exports are 70% of the world total, and are used widely for animal feed. The shortages have disrupted livestock and poultry industries worldwide.

"The use of food as a source of fuel may have serious implications for the demand for food if the expansion of biofuels continues," said a spokesman for the International Monetary Fund last week.

The outlook is widely expected to worsen as agro-industries prepare to switch to highly profitable biofuels. according to Grain, a Barcelona-based food resources group. Its research suggests that the Indian government is committed to planting 14m hectares (35m acres) of land with jatropha, an exotic bush from which biodiesel can be manufactured. Brazil intends to grow 120m hectares for biofuels, and Africa as much as 400m hectares in the next few years. Much of the growth, the countries say, would be on unproductive land, but many millions of people are expected to be forced off the land.

This week Oxfam warned the EU that its policy of substituting 10% of all car fuel with biofuels threatened to displace poor farmers.

The food crisis is being compounded by growing populations, extreme weather and ecological stress, according to a number of recent reports. This week the UN Environment Programme said the planet's water, land, air, plants, animals and fish stocks were all in "inexorable decline". According to the UN's World Food Programme (WFP) 57 countries, including 29 in Africa, 19 in Asia and nine in Latin America, have been hit by catastrophic floods. Harvests have been affected by drought and heatwaves in south Asia, Europe, China, Sudan, Mozambique and Uruguay.

This week the Australian government said drought had slashed predictions of winter harvests by nearly 40%, or 4m tonnes. "It is likely to be even smaller than the disastrous drought-ravaged 2006-07 harvest and the worst in more than a decade," said the Bureau of Agricultural and Resource Economics.

According to Josette Sheeran, director of the WFP, "There are 854 million hungry people in the world and 4 million more join their ranks every year. We are facing the tightest food supplies in recent history. For the world's most vulnerable, food is simply being priced out of their reach."

Food for thought Possible scenarios

Experts describe various scenarios for the precarious food supply balance in coming years. An optimistic version would see markets automatically readjust to shortages, as higher prices make it more profitable once again to grow crops for people rather than cars.

There are hopes that new crop varieties and technologies will help crops adapt to capricious climactic conditions. And if people move on to a path of eating less meat, more land can be freed up for human food rather than animal feed.

A slowdown in population growth would naturally ease pressures on the food market, while the cultivation of hitherto unproductive land could also help supply.

But fears for even tighter conditions revolve around deepening climate change, which generates worsening floods and droughts, diminishing food supplies. If the price of oil rises further it will make fertilisers and transport more expensive, and at the same time make it more profitable to grow biofuel crops.

Supply will be further restricted if fish stocks continue to decline due to overfishing, and if soils become exhausted and erosion decreases the arable area.

· This article was amended on Saturday November 10 2007. In the article above we referred to Lester Brown as president of the Worldwatch Institute. He is the founder; Christopher Flavin is president of the thinktank. This has been corrected.

THE WORLD FOOD CRISIS

http://www.time.com/time/magazine/ar...911503,00.html

[theveed]

Yup, this was featured last year sa Nat Geo, how global warming will affect the coastal cities, and how it'll affect the inland areas of large countries like the US/Aus/China/India etc... It said that the world's bread/rice baskets will suffer tremendously with dryspells and severe winters... 3 weeks after it was features, China had their great winter and stopped exporting rice due to shortage, same with India...

[Monseratto]

Sabi nga ng DA Secretary Yap: "Magtipid tayo ng pagkain". Prices of basic commodities are going up all over the world. Even people in Singapore protested over the rise of prices.

[uls]

the prices of major grains (wheat, corn etc) and oil are at all-time high right now coz investors/speculators/fund managers are buying into commodities coz commodities are the only investment that has "real" value... coz they can see inflation coming and they are using commodities as a hedge against inflation.

Hard assets rule.

And yes there's production at full capacity, huge demand (coz of more mouths to feed in the world)

And the push towards biofuel (cars competing with people for the same crops)

[Monseratto]

It looks it going to be a very hard year. Unleaded gas is already at 45.++. Now more pessimistic news...

Peso at '08 low vs $ as oil nears $112/barrel


MANILA, Philippines- The peso slid to the years lowest level versus the US dollar on Monday as uncertainties in the financial markets drove investors to held on to their greenbacks, one of the most acceptable currencies in the world, analysts said.

The local currency closed P41.72 to a dollar, lower than Friday's close of P41.54.

Jonathan Ravelas, BDO chief market strategist, said that with the more than 400-point decline in Wall Street on Friday and the local stock market dropping by almost 4 percent, people are looking at the dollars as “safe haven."

High oil prices are also prompting investors to play it safe, he said.

Oil prices jumped to an all-time trading high near $112 a barrel Monday in Asia as the tumbling US dollar and plunging stock markets prompted investors to seek shelter in commodities.

Light, sweet crude for April delivery spiked to a record $111.80 a barrel, up $1.59 from Friday's close, in electronic trading on the New York Mercantile Exchange, midafternoon in Singapore. It later slipped back to $111.61 a barrel.

“With what's going on in the markets today, people tend to focus on staying on the sidelines. This is not uncommon, there is a near-term risk aversion," he said.

Throughout the session, the peso traded between P41.60 to P41.72.

Total volume traded reached $794.225 million.

Earlier, the 30-company Philippine Stock Exchange index plummeted 112.85 points or 3.88 percent to 2,793.68 while the all-share index slid 57.92 points or 3.25 percent to 1,726.52.

Jason Lagrimas, analyst at online stockbrokerage firm 2TradeAsia, said there was no good news to prop up the local equities market.

"Basically, the market is reacting to the weakness in Wall Street and other regional markets. Last Friday Dow Jones went down by 194 points, crude oil went up to $110 a barrel and gold is now at $999.8 per ounce. - Cheryl Arcibal, GMANews.TV, with AP

[safeorigin]

ang masama nito ay ginagamit pa ng mga politiko ito as their "ticket" upang patalsikin si GMA. mga alangyang politiko naman!

[uls]

there's no disruption in oil production... there's no shortage...

Oil price is no longer reflecting fundamentals.

it's plain speculation.

there's no shortage of rice.

there's lots of rice to import... it's the price... mahal

[ringostarr]

yup i agree talagang speculation ang oil. when it's nearing X'mas, bigla tataas a week or 2 weeks before the holidays.

ngaun, bigla na naman tumataas bec. of the Holy week. ngaun kasi Holy week = X'mas part II sa karamihan ng mga empleyado na take advantage magbakasyon. that's why since last week, kahit 12am na ang dami deliveries ng trucks ng good to and fro sa provinces/vacation hotspots

tsk tsk iba na ang mundo na'tin, driven by opportunity na talaga. puro opportunista

SM Baguio and other vacation SM branches are open from TH to Sunday since 2-3 years ago. now, i hear na madami gusto gumaya sa SM bec. tumatabo nga naman ang ang store na open sa semana santa.

malalapit lapit na talaga gantihan ng nature, it wont be long. nawala na essence of Holy week.


=======

alam nyo sobrang nakakapagtaka talaga kumbakit ang mahal mahal ng rates to HK or Singapore ngaun Holy week. eh hindi naman nagcecelebrate ng Holy week ang mga bansang ito. parang ordinary day lang sa kanila yun.

talgang kitang-kita ng mga local travel agencies in connivance with airlines ang pagpapa-peak season ng Holy week sa travel.malamang mga hotels sa mga bansang ito talagang mino-monitor na holy week sa'tin at kasama sa syndicate na'to.

=====

sa food naman, dapat na talaga tayo magtipid ng consumption sa pagkain. nowadays, ang dami overweight and depressed and matatakaw/greedy na food lang ang ginagawang temporary relief sa mental problem nila. kaya siguro ang dami baluktot mangatiwran ngaun eh from politics, to media, to citizens. puros kasi pagkain dala dala sa katawan. kung hindi balansyado katawan, hindi din balansyado mag-isip and so nagkakaganito mundo natin, puros insensitivity.

[chilli]

in fact, i posted an article sa food section wherein our gov't is asking to lessen the rice being served sa mga food chains. for me nauubusan tayo ng rice kasi di ba mostly ng mga rice fields now are being converted into subdivisions or industrial zone. and because of this, we have less rice fields now and that is also one reason why we have rice shortage nowadays.

[uls]

here's the problem with our rice supply--

our local production cannot keep up with demand coz of rapid population growth

So we have to import rice to make up for the shortfall...

Problem is, the rice exporters are reducing exports. They're keeping their rice inside their borders coz of rising grain prices. They have to look after their interests first.

So the Philippines is having a hard time looking for sellers.

GMA even had to ask Vietnam for assurance that they will sell us rice
http://newsinfo.inquirer.net/breakin...ee-rice-supply

This March, we did buy rice from Vietnam for more than $700 per ton
http://www.hindu.com/thehindu/holnus...0803141121.htm

The price of rice just this January was less than $500 per ton.

Today's news: http://www.abs-cbnnews.com/storypage...StoryId=112427

The Philippines was just able to buy 335,500 tons of rice. But what we really needed was 550,000 tons.

The sellers are hoarding their stocks... anticipating further increase in price...

They wont sell...

There's no shortage talaga...

Meanwhile, we just have to find something else to eat hehe