Mar
13
Soaring food prices and dropping stocks
March 13, 2008 | | Leave a Comment
by Rachael
I always hear my mom complaining after she comes back from the market about how expensive the food is. According to the UN WFP Country Director for the Philippines, food prices globally has risen by at least 40%. Prices of wheat, rice and corn are at record highs, up 50% or more in the past six months, with wheat prices up 115% in a year. The poorest people are no doubt getting hungrier – either buying less food, or buying cheaper and less nutririous food as said by Ban Ki-moon; but those who used to be able to afford adequate amount of food, e.g. the Middle Class in some Asian countries, are also starting to get affected. This is the “New Face of Hunger”, as quoted from the UN Secretary General.
Reasons? As you may always have heard of – High oil and fertilizer prices, rising food demand due to growing population, decreasing supply due to climate change and biofuels, excessive exploitation of water resources, etc. Let’s see what some of the governments have been doing in response.
World rice reserves fall to the lowest level since mid 1970s when Bangladesh was in famine. The falling reserves are due to sky-shooting global rice consumption level. Last week, Philippines President Gloria Arroyo made an unprecedented call to Vietnamese Prime Minister Nguyen Tan Dung asking for a guaranteed supply of rice. The Vietnamese government, however, said it will ship only one million tons of rice to the Philippines this year, which is more than a quarter less than last year. The Filipino government is trying to secure food supplies to its people but the Vietnamese government could be thinking the same. Bangladesh traders also said that the Indian government was posing an export ban on rice. The latter raised the export price to $650 per tonne to keep stocks at home, $250 higher than the imports price the former asked for.
Another interesting story from Korea that the Ministry of Agriculture and Forestry is promoting rice noodles facing the shortage of wheat. The government talked about making instant noodles with rice instead of the expensive wheat.
Food insecurity easily leads to social instability. Therefore, it is not unusual that governments are taking measures to safeguard their country’s food supply. Further to my previous post about biofuels, when coming under high food prices and low stocks, governments should be making more determined decision between food security and energy, a dilemma of human survival between food and environments.
