Friday, March 14, 2008

The High Cost Of Eating

Surging costs of groceries hit home

[... C]orn prices have more than doubled in commodity markets over two years, and soybeans nearly tripled, according to DTN, a commodities analysis firm in Omaha. Meanwhile, with poor harvests in major wheat-producing regions, wheat prices have more than tripled.

These crops have a profound impact on food prices because they form foundations for many products, including oils, sweeteners, and flour. Corn, for example, is a key ingredient in livestock feed. When the price of corn rises, so does the price of feed, and ultimately, so do the prices of meat, poultry, and eggs.
citizens from the wealthy developed world sacrifice luxuries like expensive organic food to cope with rising prices, but for the world's developing nations, food inflation promises economic consequences that are far more dire that having to eat conventionally grown food.

China's Inflation Surges to 8.7% as Food Prices Soar
Food costs soared 23 percent after blizzards destroyed crops and snarled transport links, causing shortages. China, the biggest contributor to global growth, raised rates six times last year in a failed attempt to curb prices and more increases risk triggering an economic slump as export demand weakens.


Pork prices soared 63 percent from a year earlier, vegetables climbed 46 percent, and edible oil rose 41 percent, adding to the burden on the 300 million people estimated by the World Bank to be living in poverty. The state-run People's Daily Online reported last week that most respondents in a survey of 100,000 people described inflation as ``unbearable.''

``Food prices make up one third of the consumer-price index but for poor households it makes up more than 50 percent of their household budgets,'' said Sherman Chan, a Sydney-based economist with Moody's

Food and Energy Shortages Stoke Inflation, Anxiety in Pakistan
The line for cooking oil was nearly a block long, just a few miles from the Parliament building. Saida Bibi, fistful of rupees in hand, elbowed her way to the front of the angry crowd shoving its way into the government food shop.

She had waited in the line seven times for seven hours over the course of a week and left empty-handed every time. But with the price of cooking oil at most markets nearly double what it was at government-subsidized food shops, she couldn't afford to do anything but wait.

Global calculus of food aid for N. Korea changes
Severe crop failure in the North, surging global prices for food and tougher behavior by donors, particularly South Korea and China, are putting unaccustomed pressure on Kim Jong Il's dysfunctional communist state.


China also appears to have tightened its food squeeze on North Korea for domestic reasons. In order to meet local demand and control inflation, Beijing slapped a 22 percent tariff on grain exports to the North.

China is by far the country's major source of food imports, and the tariffs have resulted in higher prices and less grain in markets across North Korea, according to several aid groups.

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