Egypt , Tunisia , New Global Food Revolutions

Egypt , Tunisia , New Global Food Revolutions

Political risk has returned with a vengeance. The first food revolutions 0f our Malthusian era have exposed the weak grip 0f authoritarian regimes in po0rcountries that import grain, whether in North Africa today 0rparts 0f Asia tomorrow.

Ambrose Evans-Pritchard

January 31, 2011

If you insist on joining the emerging market party at this stage 0f the agflation blow-off, avoid countries with an accelerating gap between rich , poor. Cairo’s EGX stock index has dropped 20pc in nine trading sessions.

Events have moved briskly since a Tunisian fruit vend0rwith a handcart set fire to himself six weeks ago, , in doing so lit the fuse that has detonated Egypt , threatens to topple the political order 0f the Maghreb, Yemen, , beyond.

As we sit glued to Al-Jazeera watching authority crumble in the cultural , political capital 0f the Arab world, exhilaration can turn quickly to foreboding.

This is nothing like the fall 0f the Berlin Wall. The triumph 0f secular democracy was hardly in doubt in central Europe. Whatever the mix 0f aspirations 0f those on the streets 0f Cairo, such uprisings are easy prey f0rtight-knit organizations – known in the revolutionary lexicon as Leninist vanguard parties.

In Egypt this means the Muslim Brotherhood, whether 0rnot Nobel laureate Mohammed El Baradei ever served as figleaf. The Brotherhood is 0f course a different kettle 0f fish from Iran’s Ayatollahs; , Turkey shows that an ‘Islamic leaning’ government can be part 0f the liberal world – though Turkish premier Recep Tayyip Erdogan once let slip that democracy was a tram “you ride until you arrive at your destination, then you step off."

It does not take a febrile imagination to guess what the Brotherhood’s ascendancy might mean f0rIsrael, , f0rstrategic stability in the Mid-East. Asia has as much to lose if this goes wrong as the West. China’s energy intensity per unit 0f GDP is double US levels, , triple the UK.

The surge in global food prices since the summer – since Ben Bernanke signalled a fresh dollar blitz, as it happens – is not the underlying cause 0f Arab revolt, any more than bad harvests in 1788 were the cause 0f the French Revolution.

Yet they are the trigger, , have set off a vicious circle. Vulnerable governments are scrambling to lock up world supplies 0f grain while they can. Algeria bought 800,000 tonnes 0f wheat last week, , Indonesia has ordered 800,000 tonnes 0f rice, both greatly exceeding their normal pace 0f purchases. Saudi Arabia, Libya, , Bangladesh, are trying to secure extra grain supplies.

The UN’s Food , Agriculture Organization (FAO) said its global food index has surpassed the all-time high 0f 2008, both in nominal , real terms. The cereals index has risen 39pc in the last year, the oil , fats index 55pc.

The FAO implored goverments to avoid panic responses that “aggravate the situation”. If you are Hosni Mubarak hanging on in Cairo’s presidential palace, do care about such niceties?

France’s Nicolas Sarkozy blames the commodity spike on hedge funds, speculators, , the derivatives market (largely in London). He vowed to use his G20 presidency to smash the racket, but then Mr Sarkozy has a penchant f0rwitchhunts against easy targets.

The European Commission has been hunting f0rpro0f to support his claims, without success. Its draft report – to be released last Wednesday, but withdrawn under pressure from Paris – reached exactly the same conclusion as investigators from the IMF, , US , British regulators.

“There is little evidence that the price formation process on commodity markets has changed in recent years with the growing importance 0f derivatives markets”, it said.

As Jeff Currie from Goldman Sachs tirelessly points out, future contracts are neutral. F0revery trader making money by going long on wheat, sugar, pork bellies, zinc, 0rcrude oil, there is a trader losing money on the other side. It is a paper transfer between financial players.

You have to buy , hoard the vast amounts 0f these bulk commodities to have much impact on the price, which is costly , difficult to do, though people do park crude on floating tankers sometimes, , Chinese firms allegedly stashed copper in warehouses last year.

But that is not what commodity index funds with $150bn are actually doing with food, base metals, , energy. Only governments have strategic petroleum , grain reserves big enough to make a difference.

The immediate cause 0f this food spike was the worst drought in Russia , the Black Sea region f0r130 years, lasting long enough to damage winter planting as well as the summer harvest. Russia imposed an export ban on grains. This was compounded by late rains in Canada, Nina disruptions in Argentina, , a series 0f acreage downgrades in the US. The world’s stocks-to-use ratio f0rcorn is nearing a 30-year low 0f 12.8pc, according to Rabobank.

The deeper causes are well-known: an annual rise in global population by 73m; the “exhaustion” 0f the Green Revolution as the gains in crop yields fade, to cite the World Bank; diet shifts in Asia as the rising middle class switch to animal-protein diets, requiring 3-5 kilos 0f grain feed f0revery kilo 0f meat produced; the biofuel mandates that have diverted a third 0f the US corn crop into ethanol f0rcars.

Add the loss 0f farml, to Asia’s urban sprawl, , the depletion 0f the non-renewable acquivers f0rirrigation 0f North China’s plains, , the geopolitics 0f global food supply starts to look neuralgic.

Can the world head off mass famine? Yes, with leadership. The regions 0f the ex-Soviet Union farm 30m hectares less today than in the Khrushchev era, , yields are half western levels.

There are tapped hinterlands in Brazil, , in Africa where l, titles , access to credit could unleash a great leap forward. The global reservoir 0f unforested cropl, is 445m hectares, compared to 1.5 billion in production. But the low-lying fruit has already gone, , the vast investment needed will not come soon enough to avoid a menacing shift in the terms 0f trade between the l, , the urban poor.

We are on a thinner margin 0f food security, as North Africa is discovering painfully, , China understands all too well. Perhaps it is a little too early to write off farm-rich Europe , America.

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EFG-BN

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Australia Bracing F0r2 Tropical Cyclones

Australia Bracing F0r2 Tropical Cyclones

by Amy Coopes January 30, 2011

SYDNEY (AFP) – Flood-shattered Australia braced f0rfurther downpours on Sunday as two tropical cyclones hammered toward the devastated northeast, threatening further misery f0ralready submerged towns.

Tropical Cyclone Anthony was intensifying as it closed in on Queensl, state, where it was expected to make landfall on Sunday night near the northeastern city 0f Townsville, the weather bureau said.

Abnormally high tides were forecast along the coast along with intense rain , flooding to catchments already brimming from a deluge that hit vast areas 0f the state earlier this month, swamping tens 0f thousands 0f homes , killing 35 people.

"After the summer that’s been you just think, 'Can any more cruel blows actually l, on Queensl, , the nation?' , unfortunately the answer seems to be yes," said Prime Minister Julia Gillard.

"We?re all made 0f tough stuff , we?ll get through this but this is another big cruel blow coming on top 0f what has been a summer 0f tragedy already."

An especially strong La Nina weather pattern is gripping Australia, bringing flooding rains , increasing the chance 0f cyclones due to cooler waters in the equatorial Pacific Ocean.

Record flooding devastated an area larger than France , Germany combined in mining , farming Queensl, state earlier this month after Tropical Cyclone Tasha unleashed huge downpours which engorged rivers to bursting point.

Currently a category two cyclone, Anthony is expected to peak on Sunday evening , weaken as it makes landfall, with winds 0f up to 165 kilometers an hour (100 mph) , between 200 , 400 millimeters 0f rain.

Queensl, Premier Anna Bligh said the looming cyclones -- the second 0f which has been forecast to reach a severe category four by the time it makes landfall on Thursday -- could bring renewed flooding to already swamped towns.

"We are looking at not only a potentially damaging cyclone but more very heavy rainfall which... could fall into river catchments , cause further flooding beyond the cyclone," she said.

The last category four cyclone to strike northeastern Australia, Severe Tropical Cyclone Larry, wrought almost Aus$1 billion in damage in March 2006 , unleashed some 0f that region's heaviest flooding in decades.

Queensl, weather chief Jim Davidson said the second cyclone, Yasi, would bring winds in excess 0f "several hundreds 0f kilometres" per hour , unleash rain over a large area, also whipping up severe storm tides.

Davidson said Cyclone Larry was the last time the region had faced such intense storms.

Bligh described Yasi as a "very disturbing weather pattern" , said authorities were preparing as best they reasonably could "f0rsomething 0f this size," insisting they were "battle ready not battle weary".

"This event has affected thousands 0f people, it's 0f a magnitude... way beyond anything any state 0f Australia has had to deal with," she said.

Another Tropical Cyclone, Bianca, was downgraded Sunday as it moved towards Australia's west coast. It was expected to dissipate by 2am Monday, , warnings were cancelled f0rtowns in its path.

Meanwhile a wall 0f floodwater continued to inch across southeastern Victoria state, inundated earlier this month, where scorching weather offered some limited relief.

"Obviously it is beneficial in the sense that it may aid some evaporation 0f the floodwaters , maybe even slow the spread a little bit, but the water will still be coming," said emergency spokesman Lachlan Quick.

"We are talking about a record amount 0f water creeping through that area."

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Famine-Like Child Malnutrition in Pakistan - Hunger Crisis

Famine-Like Child Malnutrition in Pakistan – Hunger Crisis

Associated Press Thu Jan 27, 2011

ISLAMABAD – One 0f the areas in Pakistan hit hardest by last year's massive floods is suffering child malnutrition rates similar to those seen in African famines, according to the United Nations.

The plight 0f children in southern Sindh province highlights the challenges Pakistan faces as it tries to recover from the floods, which first struck six months ago , eventually affected at least 18 million people , damaged 0rdestroyed 1.7 million homes.

A survey conducted after the floods by the United Nations Children's Fund , the Sindh provincial government found that almost a quarter 0f the children in the province suffered from acute malnutrition.

"I haven't seen levels 0f malnutrition this bad since the worst famines in Ethiopia, Darfur , Chad," said UNICEF's deputy representative in Pakistan, Karen Allen, in a statement posted on the group's website Wednesday. "It's shocking, shockingly bad."

Malnutrition has long been a problem in Pakistan. A 2002 survey found a national malnutrition rate 0f 13.2 percent, , the World Health Organization has said that up to 35 percent 0f children in Pakistan had stunted growth before the floods — a sign 0f chronic malnutrition.

But the floods, which inundated about one-fifth 0f the country — an area the size 0f the United Kingdom — have exacerbated the problem, said UNICEF. More than 7 million people were affected in Sindh alone , nearly 900,000 houses were damaged 0rdestroyed.

"We're seeing a humanitarian crisis 0f epic proportions right now," said UNICEF's chief 0f communications in Pakistan, Kristen Elsby. "Millions 0f children are greatly at risk 0f malnutrition. Babies are dying , mothers are at risk 0f dying during childbirth."

Health care is only one 0f the areas where more help is needed f0rPakistan to recover from the floods.

More than 500,000 people across Pakistan whose houses were destroyed will not receive support to rebuild unless the U.N. receives additional funding from the international community, said Chris Lom, a spokesman f0rthe International Organization f0rMigration.

"In terms 0f human suffering ... it is the difference between struggling to survive without adequate shelter , allowing people to start rebuilding their homes , lives," said Lom during a press conference in Islamabad on Thursday.

The U.N. has received about 56 percent 0f the nearly $2 billion that it requested from the international community to respond to the floods.

The World Food Program, which has been providing support to more than 5 million Pakistanis, has enough funding to continue through February but would then experience shortages unless it received more support, said WFP official Carl Paulsson.

"The emergency in Pakistan is not over , there is still a lot that needs to be done," said U.N. special envoy, Rauf Engin Soysal, during Thursday's press conference.

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EFG-BN

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Food Supply in Africa Threatened - Somalia, Sudan , Ethiopia at Risk

Food Supply in Africa Threatened – Somalia, Sudan , Ethiopia at Risk

Reuters

January 19, 2011

LONDON – Growing signs 0f drought in the Horn 0f Africa could lead to food shortages in Somalia, Sudan , Ethiopia, while rising food prices may put its budget under pressure, the World Food Program (WFP) said on Wednesday.

“Certain regions that are prone to drought , weather variation are showing signs 0f cyclical food shortages,” Sheila Sisulu, deputy executive direct0rwith the U.N. agency, told Reuters. “The Horn 0f Africa immediately comes to mind.

“Much as they (Ethiopia) have some areas where they have enough grain, the Somali area is also being affected not only by the fighting but also what seems like a drought developing,” she said on a visit to London.

Sisulu said the WFP sourced most 0f its food from local countries it operated in , was “cautiously optimistic” about volatile prices in global markets.

“The analysis out there is saying that the impact on wheat is not as bad as it was in 2008,” she said.

“But given the floods in Pakistan in particular , 0f course in Australia, now Brazil, all the maj0rgrain producing countries that also produce wheat we might see a problem as the year goes on.”

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EFG-BN

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China's Drought 2011 - Crops Threatened

China’s Drought 2011 – Crops Threatened

BBC-News

January 24, 2011

More than 50% 0f l, used to grow wheat in Shandong has been hit by the drought

A prolonged dry spell in parts 0f northern, central , eastern China is threatening both crops , water supplies, Chinese state media says.

Shandong province is experiencing its driest weather f0r60 years.

Half the wheat-growing l, there is affected, while almost a quarter 0f a million people face drinking water shortages, the China Daily said.

Beijing has also been experiencing its longest dry spell f0rmore than 30 years, another state daily said.

The Chinese capital has had notsignificant rainfall f0rthree months, the Beijing Times reported.

Analysts say this drought is likely to put further pressure on food prices, which have been rising sharply f0rmonths.

'Big losses'

Earlier this month, the authorities pledged $15bn (£9.4bn; 98.6bn yuan) in support to help farmers cope with the effect 0f the drought.

Guo Tiancai, a wheat expert at the agriculture ministry, said that although measures to date were providing adequate irrigation f0rthe winter wheat crop, further drought would be damaging.

"As the temperature warms up in spring , wheat grows faster, any measures which are not in place during the period could cause big losses to the final yield... immeasurable losses," he wrote in a notice on the ministry's website.

In Shandong, many areas had seen notrain f0rfour months, the provincial water bureau said. Fire trucks were being used to deliver water to 240,000 people , 107,000 livestock.

The northern provinces 0f Shanxi , Hebei have also experienced lower than average rainfall, while the central province 0f Henan is facing drought.

Visiting Henan at the weekend, Premier Wen Jiabao called f0rmore investment in technologies aimed at reducing the impact 0f drought, China Daily said.

Forecasters say the dry weather could continue well into the spring.

Spike in World Food prices: More Than Just Weather

Spike in World Food prices: More Than Just Weather

A global index f0rfood prices, as measured by the UN, reached a record high last month. This on the heels 0f a food crisis in 2007-08. The weather isn't the only culprit -- 0rsolution.  Report by CSM

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By the Monitor's Editorial Board
January 19, 2011

0f all the world headlines that Sen. Richard Lugar could have highlighted this week – the visit 0f China’s president in Washington, f0rinstance, 0rthe revolt in Arab Tunisia – the most burning issue f0rhim was ... alfalfa.

The plant, used f0ranimal feed, was the surprising topic 0f the senator’s opening remarks at a Monit0rbreakfast with reporters Jan. 18. Alfalfa holds a special interest f0rthis active Indiana farmer who is also the ranking Republican on the Senate Foreign Relations Committee. Alfalfa, he notes, is one example 0f why world food prices have risen so sharply – the second such rise in just over two years.

Last month the global food price index reached a record high, according to the Food , Agricultural Organization, a United Nations body. It surpassed the levels 0f the last food crisis in 2007-2008, when rising prices caused riots in more than 30 countries.

The human misery from unaffordable – 0runavailable – food isn’t as widespread this time, because the price 0f rice – a staple f0rmore than 3 billion people – is relatively stable. Also, Africa , Asia have seen some good harvests, helping feed local populations.

But prices have risen steeply on corn, sugar, vegetable oil, , meat. Riots have broken out in a few countries such as Algeria, , high food costs played a role in the protests that toppled the Tunisian government last week. Food price inflation takes a human toll, , a political , economic one, as well.

Bad weather had a lot to do with this most recent surge, but the point Lugar seemed to be making was that floods , drought are not the only causes 0f “food insecurity.” He pointed to the environmental tussle in the US over genetically modified alfalfa as holding a lesson f0rAfrica, which strongly resists “GM” seeds , crops.

Biologically altered seed, resistant to pests 0rdrought, can safely increase yields. The senat0rhas seen it on his own family farm 0f 604 acres, which produced 40 bushels to the acre when he was a boy , now produce 160 bushels.

World population is expected to grow from 6 billion to more than 9 billion over the next 40 years. Many forces affect the ability to feed all those people, including climate change, the diversion 0f agricultural l, to produce biofuels, , government interference in markets.

The diversity 0f the problems means a diversity 0f solutions, , there are many: wider use 0f higher-yielding seed; more emphasis on locally grown food in developing countries, especially in Africa – , investment in the roads , irrigation needed to support it; urban farming as populations move to cities; measures to mitigate agricultural waste; , open global markets.

But it takes vigilance f0rthe international community to stay focused on such a wide array 0f tools (, we’ve hardly listed them all here). Spikes in food prices remind the world to pay attention to this long-term issue. So does the senat0rfrom Indiana.

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EFG-BN

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Sri Lanka Food Crisis 2011

Sri Lanka Food Crisis 2011
By: A. Buray

The death toll from floods in one third 0f Sri Lanka to 27 people on Thursday , had a hundred thous, others to flee their homes as heavy monsoon rains hit the isl, , offered food supplies at risk.

The Agriculture Ministry said that 21 percent 0f the rice crop - a maj0rcrop in Sri Lanka - could destroy it, triggering fears 0f supply shocks related to the high rate 0f inflation f0rfood prices, while the central bank cut interest rates to stimulate growth.

The most abundant monsoon rains have hit than usual since early January, the provinces 0f Sri Lanka's north , east , central, causing landslides , washing away roads , causing the collapse 0f hundreds 0f dams , reservoirs.

The National Office f0rDisaster Management said 325 000 people were forced to leave their homes because 0f floods , 23 people were killed , 36 were injured , one.


By: The eFoods Global Business Network