Q & A: Why rising food prices


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22 March 2011 last updated at 10: 50 GMT food prices have risen worldwide.

And hit with floods farmland in countries such as Australia, which exported its wheat and sugar cane all over the world, there are fears that they could continue to rise.

The wholesale cost of food records according to the UN food and Agriculture Organization (FAO) hit its highest monthly figure in January.

Prices were higher than its peak in 2008, when a food crisis prompted riots and demonstrations all over the world.

Oil prices are also edges that reached their highest level in two years.

Why rising food prices?

Commodity price rises

After the 2008 peaks, good harvests for basic food prices helped draw.

But in 2010, exporting countries supplies damaged storms in some of the world's largest food.

This has helped, you push food prices almost 20% higher than a year ago, according to the FAO. (The 2010 number was slightly below the annual measure for 2008 as a whole.)

Floods hit the planting season in Canada, and destroyed crops of wheat and sugar cane in Australia.

In addition, drought and fires devastated crops of wheat and other grains in Russia and Russia calls exported the surrounding region in the summer to ban.

As a result wheat production expected to be lower than this year will be over the last two U.S. Government estimates.

Year global production global consumption stocks (end)

Millions of tonnes source: US Department of agriculture

It will be the number three on the files.

But what is crucial, it is expected a further important factor in the level lag behind the increasing demand for food,.

Have the prices for all food increased?

The picture is mixed.

Not as much as other raw materials, rice, which is a staple food in many Asian countries, has risen since a record harvest is expected this year.

In addition, not the same price pressure have experienced some countries that rely on supplies from disaster affected exporters.

Prices for maize in East Africa, where it is the most important food culture, for example, to up to 50% after bumper harvest declined.

Biggest movers by commodity prices

There were also more localized weather problems. You are no less important to farmers and consumers in these areas but less coverage - have received.

Onion prices have risen in the last month, after heavy rains in the West, where much of its supply comes in India.

How many Governments around the world has come to be the Government under strong pressure, as onions are such an important part of the Indian diet.

In Central America, has damaged bean cultures lack of rain and caused the largest single price increases, according to a recent FAO report.

The price of red beans, part of which nutrition in the region, has a staple in the last year in El Salvador and almost Honduras triples.

What is with speculators?

The FAO says speculators, the raw materials on the financial markets Act are not to blame for the enormous increase in the prices, but they have made the matter worse.

Take for example sugar. Production was with the growing demand from developing countries, to keep prices substantially increased pressure.

Commodity price rises over 12 months

But the Economist Intelligence Unit also refers to the role of speculators, discovered the situation as an investment opportunity and "exaggerating" the price rises.

The movement of the world (WDM) is committed, these bets on prices put an end to areas.

She want more regulation from the buying and selling of futures contracts - an agreement are a commodity at a certain price at a certain time to sell.

They were created to reduce uncertainty, because the manufacturer has a guaranteed price and ensures the buyer the goods they need. Effectively, it is a way for both sides to reduce the risk of doing business.

But the WDM and others think that trade these contracts such as shares and stocks nor pushing higher prices for food at the expense of the poorest people.

And what is happening to the price of oil?

Read the most important story that the price of a barrel of oil has exceeded $115 on the London market, the highest level for two and a half years.

There have been sharp increases in the last weeks of political turmoil in oil producing countries in the Middle East and North Africa.

This uncertainty is the increasing demand for oil.

Analysts refer thousands of new vehicles in particular to the thirst for energy from China to its factories and power fuel.

Such as food, it is difficult to escape the impact of rising crude oil prices.

It not only directly affects the cost of fuel and energy, but also feeds were in the prices of the other by increasing the cost of production and transport.

As many economies around the world to restore a painful global recession fighting, are not wage rises to keep up. So many really feel the squeeze.


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