Soaring food prices around the world

Posted by Skycypher on Friday, April 11th 2008

(2 votes, average: 5 out of 5)

Loading ...

11
Apr

Morning Edition, April 11, 2008 · Demand for ethanol and other biofuels is a “significant contributor” to soaring food prices around the world, World Bank President Robert Zoellick says. Droughts, financial market speculators and increased demand for food have also helped create “a perfect storm” that has boosted those prices, he says.

The soaring costs of food and fuel led to riots in Haiti and Egypt and a general strike in Burkina Faso this week. Skyrocketing food prices are topping the agenda this weekend of the World Bank and International Monetary Fund annual spring meetings in Washington.

Zoellick held up a bag of rice during a news conference Thursday to illustrate the severity of the food crisis.

“In Bangladesh a two-kilogram bag of rice … now consumes about half of the daily income of a poor family,” he said. “The price of a loaf of bread … has more than doubled. Poor people in Yemen are now spending more than a quarter of their incomes just on bread.”

And Zoellick says prices for basic staples will remain high for an extended period of time.

“I think you have a perfect storm of things coming together,” he tells NPR’s Steve Inskeep in an interview. “You have high energy prices. You have the increase in demand from some of the developing countries. … As the Indian commerce minister said to me, going from one meal a day to two meals a day for 300 million people increases demand a lot.

“You have some of those countries moving to a different diet. So more meats require more grains. You have the biofuels expansion, which is a big source of demand.”

In the past two years, the price of corn in the United States has more than doubled, driven partly by demand for alternative fuels such as ethanol.

Climate, including droughts in Australia and Europe that have limited crop production, has also had an impact on food prices, he says.

“All this together has led to a real reduction in food stocks,” he says.

Commodities and other traders who are betting on higher prices also contribute to the climb.

“Those combinations of events have led to an emergency situation,” Zoellick says.

The World Bank has projected that food prices will stay high or go even higher over the next couple of years, and biofuels are a major factor.

“Biofuels is no doubt a significant contributor,” Zoellick says. “It is clearly the case that programs in Europe and the United States that have increased biofuel production have contributed to the added demand for food.”

Popularity: 56% [?]

Subscribe to the post comments feeds or Leave a trackback

3 Comments Already

Skycypher Said,

April 11th, 2008 @4:58 pm

World Bank President Robert Zoellick is a tool. His presentation and forked tongue make liars and crooks from any era - alive or dead - cringe with envy and glee.

Zoellick is a technocrat and a veteran of the rough and tumble of international diplomacy as well as the corridors of power in Washington. While Wolfowitz’s career advanced under the aegis of the pugnacious Dick Cheney, Zoellick’s progress followed that of James Baker, the consummate (fixer) Republican insider.

Wolfowitz and Zoellick, along with Donald Rumsfeld, were two of the 18 signatories to a letter to the then President Bill Clinton in 1998 that called for the overthrow of Saddam Hussein - a letter which, in retrospect, suggested that senior members of the Bush administration were itching to attack Iraq. And both men also served in the informal group known as the “Vulcans” convened by Condoleezza Rice to advise George Bush on foreign policy before the 2000 presidential election.

Skycypher Said,

April 13th, 2008 @6:24 am

Deadly rioting broke out this week across Haiti and Egypt, where rampaging inflation has driven up food prices. The United Nations estimates that the cost of food in those countries has nearly doubled in the last two years.

In Egypt, bread is so scarce that in some places it is sold behind a barricaded wall. In Haiti, the 9,000 U.N. peacekeepers have been ordered not to fire on civilians while widespread looting and violence continues.

The Group of Seven is meeting in Washington this weekend to address instability in the global economy, but many analysts seem skeptical about how effective the organization will be at steadying inflation.

Bettina Luescher, the chief North American spokeswoman for the U.N. World Food Program, tells Scott Simon that the factors contributing to the increasing food prices have created “a perfect storm.” She says those factors include a rise in oil and energy prices and an economic boom in developing countries like India and China that is increasing demand, as well as climate changes causing droughts and floods.

In addition, Luescher says, some farmers are shifting their crops from food to those used for alternative fuels, like corn used for ethanol, because of rising demand.

“We don’t want to, you know, categorize the biofuels as either good or bad, but what we are really seeing is it’s part of the market speculation that is going on,” she says. “Sometimes farmers are betting that that will be a much better investment, and some of the [crops that] could have been used for foods and are now being used for fuel.”

The World Food Program needs money to implement aid operations on the ground, Luescher says, and the organization is also looking at long-term safety nets, such as school feeding programs.

“That is one of the long-term things where we think that from the richer countries much more money should be spent on programs like that, so that we can have a long-term impact,” she says.

Skycypher Said,

April 22nd, 2008 @4:58 pm

April 22, 2008
U.N. Official Warns of Imminent Food Crisis

The head of the U.N. World Food Program says large-scale international action is needed to address an immediate food emergency that threatens to destabilize developing nations.

Speaking at a summit in London on Tuesday, Josette Sheeran said growing hunger is a threat to the political and economic stability of poor nations, with food riots threatening democratically elected governments.

Sheeran’s remarks echoed those of British Prime Minister Gordon Brown, who pledged more than $100 million to the World Food Program and said the World Bank, the International Monetary Fund and the United Nations need to work together to tackle the food crisis.