Monday, February 7, 2011

Short summary of why food prices are spiking world-wide. (YES, I am obsessed with this!) "Fact is, everyone eats"

Why food prices are increasing world-wide in a few easy to understand paragraphs (source: The Source):

""On the most basic level, there are over 70 million more people who’d like to eat in the world every year, alas just as crop yields are beginning to top out. The swelling middle classes of Asia also want more meat than ever before. This requires many kilos of animal feed, grown for every fillet and rib-eye on the grill.

Moreover, a lot of land which once grew crops is now under the urban sprawls of Asia’s mega cities, effectively growing people instead.

That’s the backdrop; now take a look at the foreground. There we see the worst drought in Russia and the Black Sea for 130 years, late rains in Canada and so on. The latest floods in Australia won’t have helped either, as it is a major exporter of wheat.

Sure enough, in response to higher prices comes the reinforcement of stockpiling. Vulnerable governments are scrambling to lock up world supplies of grain while they can. Algeria bought 800,000 tonnes of wheat last month, and Indonesia has ordered 800,000 tonnes of rice. Saudi Arabia, Libya, and Bangladesh are trying to secure extra grain supplies.""

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