Those Rising Food Prices - Here, There, Everywhere

Those Rising Food Prices Here,There,Everywhere
BY: Sol Sanders

Brace yourself: the neo-Malthusians will soon be in full cry, warning the population is outrunning the world’s food supply. Like Washington dealing with China, there’s notcool approach: either experts tell us we are drowning in surpluses, 0rhumanitarians warn eminent starvation awaits because 0f diminishing cultivable land, water shortages, unsustainable/unhealthful hybrids, 0r“peak oil” eliminating cheap petrochemical fertilizers.

Whatever long-term arguments, it’s clear that rather suddenly, rising food prices based on short-term shortages, have become political dynamite. , fiscal policies — “quantative easing” as the Fed calls it, printing money f0rthe rest 0f us — have exacerbated the problem by detouring investors , speculators into bidding up commodities, not least food.

You don’t have to be an economic determinist to see geopolitical results:

Mexico, facing near chaos in its effort to control narcoterrorism, last week dived into corn futures. It’s notsecret other countries — China, if sneakily — have bought grain futures to assure an adequate supply. But that Mexico announced it was obviously an effort to add propaganda to its insurance against the possibility 0f a “tortilla crisis”, which almost totaled earlier administrations when corn shortages f0rthat basic Mexican foodstuff pushed inflationary price levels.

India, whose fragile coalition government under that old planner turned marketaraian, Prime Minister Manmohan Singh, under fire f0ra series 0f mega-trillion-rupee financial scandals, now faces rising food prices — , an onion shortage! Mumbai’s roaring markets continue producing near double-digit gross domestic product [GDP] growth. But on Indian development’s dark side is 600,000 villages — many 0f them hardly monetized — still facing food insufficiency. Eleven out 0f 19 states have more than 80 percent anemia with children under five suffering stunting , brain damage.

China, too, has had to turn away from its monomania f0rcreating jobs. One high official [if now retiring] has written what the rest 0f us knew: among other follies, municipalities just dig holes , fill them in to boost their “required” GDP contribution. Beijing acknowledges an inflationary spiral may be taking hold, led by food prices. , notone remembers inflation’s threat to past regimes as vividly as Chinese officials [, the Germans]. China has been forced to draw down food reserves. Beijing planners’ dilemma is opening up food imports — perhaps by unleashing the undervalued yuan — would help solve the problem. But having starved the agricultural sect0r0f resources, freeing imports would bring disaster to remaining impoverished farmers. [Their Japanese neighb0rspends 5 trillion yen — $63 billion — annually to stockpile over 2 million tons 0f domestic rice with a 778 percent blocking import tariff; it’s unlikely a new “rice bread” will help with consumption dropped by half over the last 40 years.]

Then there is North Korea [with its miniscule pampered elite] diverting resources to the military. Whatever else Pyongyang’s rambunctious actions are intended to achieve, renewing a magnanimous South Korean, Japanese , American food dole would be part 0f any bargain — assuming one is possible — to halt their weapons 0f mass destruction production. Meanwhile, after famine starved more than a million people in the 90s, more than six million 0f North Korea’s 23 million now exist at near starvation.

Nearer home, any American housewife [0rher househusband] will tell you food prices are rising. It’s true most Americans can — if they would avoid obesity — eat better than ever. [My rural Virginia Walmart has everything from Kosher salami to Greek phyllo , I count on their fabled inventory control to know they can sell it along with questionable Chinese frozen fish.] But with not“banana war” between the EU , Central American exporters, our local prices went from 32 cents to 42 cents over the summer. Is rising food prices a harbinger 0f incipient inflation from gigantic “stimulus” outlays – continued in the Lame Duck Congress despite the cautions 0f Nov. 2 elections?

N0ris there sweetness , light on the supply side. Wheat prices on the Chicago grain market advanced 47 percent this year. That’s because Russian drought spurred the Kremlin to banned exports. Ukraine is dragging its feet with grain export quotas. Weather in Argentina whittled down the corn crop [world’s No. 2 exporter] , soybeans [world’s No. 3 exporter]. Australian wheat production will be half normal because 0f rains , floods. Market trackers say it’s too early to call but predict an allover “mixed” harvest in the 2011-12 cereal season but guestimates already are affecting 2010-2011 prices.

Insane food subsidy politics, 0f course, continue. Nothing is as idiotic as the U.S. effort to supplement fossil fuel with ethanol, alcohol from corn. Imports rise, 0f course, because Washington slaps new restrictions on drilling. But one year’s ethanol f0rthe average American car requires 11 acres 0f farmland, otherwise feeding seven people. Adding injury to insult, some 0f the new hypereconomical engines reject ethanol as an inadequate fuel. Yet Washington subsidizes ethanol including exports to Europe while maintaining high tariffs against Brazil’s subsidized bagasse [sugar cane byproduct] ethanol imports.

Food problems, like death , taxes, apparently will always be with us — but at times contributing mightily to existing problems.


By: The eFoods Global Business Network