Frenzy in Food Markets

[Hannah Bell]

So now we are back in another phase of sharply rising global food prices, which is wreaking further devastation on populations in developing countries that have already been ravaged for several years of rising prices and falling employment chances. The food price index of the FAO in December 2010 surpassed its previous peak of June 2008, the month that is still thought of as the extreme peak of the world food crisis...

No one can claim that we could not see this coming. In fact, ever since the severe price crunch of mid 2008, there have been those who argued that unless major changes were made both in national policies towards agriculture and the way in which we manage the global trade in both agricultural commodities and their futures markets, such a repeat would be almost inevitable.

But the world is a curious place nowadays, with public memory so short as to be almost non-existent and media analysis (as well as public policy) still dominated by those who have comprehensively messed it up but have no sense of shame. So the same tired old reasons for the current food price increase are being trotted out once again, even though they were completely wrong two years ago and are wrong again today.

Wrong reason number 1: Global food prices are increasing because of increased demand from developing countries, especially the rapidly growing large populations of China and India. In fact, FAO data tell the real story, which is quite the opposite. The total consumption of major food grain increased only slightly in the world as a whole (less than 2 per cent) and for several crops it even fell. The total amount of food grain traded in global markets has actually fallen...

http://mrzine.monthlyreview.org/2011/ghosh250111.html

[Fumesucker]

1. "public memory so short as to be almost non-existent "

This is what hurts us the most I think..

Although I'm not sure it's public being able to remember the past as much as they never had a clue what was going on in the first place. I can count the number of people I know IRL with whom I can have a genuinely intelligent discussion about public policy on the thumbs of one hand, everyone else is either utterly clueless or worse, drenched in Teabagger or Republican propaganda.

[aquart]

2. We also need to anticipate crop failures due to extreme weather conditions.

If the Gulf Stream has shifted as severely as the map I saw on my local weather report last night, we need to rethink agriculture all over this country.

[SpiralHawk]

3. Nota Bene

...this evplving story will weave its way through 2011 in myriad ways...

[corpseratemedia]

4. I was wondering if the increased speculation in commodities is tied to less

profit being made in production now that its all so very low cost..?? (labor is now so "cheap" with globalization so things are so cheap so gotta squeeze out the profits with the essentials?)

[Karmadillo]

5. Let them eat free trade!

nt

[kenny blankenship]

14. Hey, if poor starving people were smart they could use free money from central banks to speculate

on staple foodstuffs and get rich, too! They're just too lazy and negative to look past the ends of their own exposed ribcages and distended, hypoalbuminemic bellies and see THE OPPORTUNITY all around them!

[LARED]

6. I read just the other day in the WSJ? that presently

40% of the USA corn crop is used to produce ethanol.

[xchrom]

7. recommend

[customerserviceguy]

8. I wonder

Are we still paying farmers NOT to grow food? If so, why?

[fasttense]

9. Ravi Batra predicted this would happen.

About a year ago, Dr Ravi Batra was on the Thom Hartmann show and predicted commodity prices would rise excessively because of out of control speculation. Then food prices would skyrocket like the price of oil.

So, I got into farming.

[MadHound]

10. Funny how the author is ignoring the real supply killers this year,

Those caused by the weather. The Russian wheat crop was decimated, as were China's, and to a lesser extent Europe. Not to mention that the Russian winter wheat crop is way down, and anything planted in Australia is probably swept away on the flood.

I don't doubt that speculators are playing some role in the rise of fuel prices, as are biofuels. But you can't simply ignore the massive crop losses we've experienced around the globe this year.

[Hannah Bell]

12. he didn't ignore it at all, he discisses it explicitly, quantifies it (not as large as claimed),

& exolains why it can't be the cause of the price hikes.

[safeinOhio]

11. That frenzy is in the markets

not on the shelfs. It is driven by speculation, just like gold and oil. We are now seeing big drops in the prices of both of those. I think more investors will go broke than people will not have enough to eat because of all the speculations.

[anamandujano]

13. I'm one of the clueless on this issue. Thanks for the thread &

link. Rec.