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World Food Prices Hit Record Highs Amid Oil Jitters
ROME (AFP) - – World food prices have hit record highs and oil price spikes could push them even higher, the UN food agency warned on Thursday, as increasing violence in Libya sent jitters through commodity markets.
Farmers shake unhusked rice during a harvest in the Bekasi district on the outskirts of Jakarta March 1, 2011. (REUTERS/Enny Nuraheni) The Food Price Index, which monitors average monthly price changes for a variety of key staples, rose to 236 points in February from 231 points in January, the UN's Food and Agriculture Organisation (FAO) said.
It was the highest level since FAO began monitoring prices in 1990.
"Unexpected oil price spikes could further exacerbate an already precarious situation in food markets," David Hallam, director of the Rome-based FAO's trade and market division, was quoted as saying in a statement.
"This adds even more uncertainty concerning the price outlook just as plantings for crops in some of the major growing regions are about to start."
FAO economists warned that food prices were likely to remain high until the outlook for this year's harvests is known by around April.
Crude prices dipped on Thursday after pushing higher in nervous trading amid fighting in oil-rich Libya between Moamer Kadhafi loyalists and rebel forces.
Brent North Sea crude for delivery in April fell 63 cents to $115.72 per barrel. New York's light sweet crude for April, known as West Texas Intermediate (WTI), shed 61 cents to $101.61.
Prices jumped on Wednesday by nearly three dollars in New York.
"Persistent uncertainty in the region continues to support fears of contagion," British bank Barclays Capital said in a report.
"Lost output from countries like Libya and the increasing likelihood of a pushback in foreign investment is set to support longer-term prices," it said.
Analysts at Germany's Commerzbank warned: "There is still a risk of the unrest spreading to other oil producing countries of the region."
The International Energy Agency said oil exports from Libya had been cut by between 850,000 and one million barrels per day, out of a total of 1.6 million barrels sent mostly to European buyers before the uprising.
Loyalist attacks on the strategic Libyan oil port of Brega, home to major petroleum operations, added to concern, while popular unrest also affects the Arabian Peninsula with protests in Bahrain, Oman and Yemen.
Higher oil prices affect all aspects of the food production chain, from fertiliser to transport.
The FAO has warned that rising food prices are in turn driving unrest around the world, including recent uprisings in the Middle East and North Africa.
Aid agencies have called on the international community to take urgent action to put an end to the recent food price volatility.
The G20 group of leading world economies has vowed to take action.
The FAO said the February increase in its Food Price Index was the eighth consecutive monthly rise, with dairy prices up 4.0 percent from January and cereal prices up 3.7 percent due to increased maize demand and lower supply.
The UN food agency said that this was due to "larger use of maize for ethanol production in the United States" and "statistical adjustments to China's historical supply and demand balance for maize."
Meat prices meanwhile rose 2.0 percent from January, while the price of oils and fats rose only marginally and sugar fell slightly.
A breakdown of Thursday's FAO data showed that in China prices for rice and wheat flour stabilised after government assurances on reserves but they remained 23 percent and 16 percent above their levels for February 2010.
The data also showed that coarse grain prices have started to increase in Africa, while in South America wheat and maize are also trending higher.
In the former Soviet Union, wheat prices stabilised or decreased.
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7 Comments so far
Show AllI wonder about the racial underpinnings to food policy. Those who can't afford to buy food are condemned to suffering and death--those who can afford it survive and have children. The winners are Northern Europe, America, Japan, China and a few other Asian countries. The big loser is Africa. Is that pattern connected to racial attitudes? I would be surprised if it wasn't. After all, would the winners care more if a continent of whites were going without food? Without a doubt. There would be food banks set up for the poor and biofuel production would be curtailed if that was the case. Some things never change.
I'm always amazed at how these things are reported. Spikes in oil and food prices are treated as if they were natural phenomena, and not the concrete results of concrete actions of greed and self-interest on the part of financiers who play the market of the world's basic needs like some giant casino game. There will be no peace on earth until the nations of the world decide on a regulatory system that sets limits to the power of speculators to bleed the people of the globe.
This will only get worse with genetically modified crops that are dependent on this cycle rather than other methods of food production. Like the wars for oil, it takes oil to fight wars for more oil, and food is becoming part of that destructive cycle.
"Persistent uncertainty in the region continues to support fears of contagion," British bank Barclays Capital said in a report.
"contagion".....
See? - It's a pandemic of oppressed people uprisings.
Sneeze some equality today.
Speculators having a field day???
The Fundamentally Evil Rise in World Food Prices is caused by Rich
US Farmers using money to support the Needless Political US Ethanol
Program, of using Ethanol to raise the Octane of Gasoline! There are
Two Controlled Combustion Cycles that have No Octane Requirements
or No Cetane (for Diesel) requirements! These are the Mann Diesel and
the Texaco Gasoline Controlled Combustion Cycles, which use the Robert
I Bosch, Direct Cylinder Head Fuel Injection System as does Cummins
Diesels! Richard Nixon intended to mandate the use of these two Controlled
Combustion Cycles on all Automotive Engines sold in the US, which as the Gigantic Exxon Type High Octane/High Cetane use twice the Crude Oil to make HHigh Octane Gasoline and High Cetane Diesel, as does cheap, small, even Portable Refineries the US Army uses and make Engine Fuel for Automotive Engines that use the Two Controlled Combustion Cycles! This would have in the twenty years or less that it took the US Automotive Fleet to be changed over, cut the US use of Crude Oil for Automotive Engines in Half! This is the Reason for the New York Times Phonied Up Pentagon Papers which were made to be released to hide the Real Reason for the Vietnam War! The Real Reason for the Vietnam War was the Desire of the US Western Oil Companies for a War to raise
World Oil Prices, which helped the Soviet Union go on another extra ten years before collapsing, which were the Och's and Sultzberger's motivation in running the Phonied Up Lying Pentagon Papers, which had they been Officially Released, would have been Highly Questioned! The New York Times was No Julian Assange; it was part of an Oil Company/US Government Plot to give credibility to what would otherwise have been Incredible and laughed at as Rediculous Lies! The Oil Companies were even able to hire Supreme Court Chief Justice Earl Warren to say that there was no Evidence even suggesting that the Assassinations of John F. Kennedy, Martin Luther King, Robert F. Kennedy, and
the Maiming of George Wallace were part of an Organized Plot, much less the Western US Oil Companies! Having gotten away with the Physical Assassinations, the Western US Oil Companies, led this time by the Eastern Anglo-American International Oils, had no compunctions about engaging in a mere Character Assassination of Richard Nixon. to stop him from driving down the International Price of Crude Oil! The US Slavery leaders did the same to John Jay, for being Anti-Slavery, and hired Thomas Jefferson as their front man and stooge for slavery!
All that you read in all of Today's History Books about John Jay, is
Fundamentally Evil Slavers' Propaganda Lies. The Three most Indispensable Men
in US History in Preserving the United States of America, are George Washington, John Jay, and General William Tecumseh Sherman! Until one studies these Three Indispensable Men, One does not know how near a thing the Preservation of the United States Really Was! These Two Controlled
Combustion Cycles were reviewed in 1976, in Barron's Magazine, and in
Popular Science Magazine, under the name of Texaco Combustion Process,
which the Oil Companies later gave to a completely different Steam Turbine
Power Plant Process, to hide the originally Automotive Engine Controlled
Combustion Cycles, which use fuels that have no Octane nor Cetane, as the
Robert I Bosch Direct Cylinder Fuel Injecton injects Engine Fuel only as the
Cylinder rises to the top of the Compression Cycle or Stroke, at which time
Knock or Pre-Ignition becomes Impossible, as that is when Ignition is set to occur!
The food crisis is lethal, and we must face the facts. Lets do some math.
From September 2005 to January 2011 the farm price of 20 pounds of wheat went up by a whopping $1.35, rice went up $1.41, and corn $1.30. Previously the farm values for 20 pounds were $1.11 (wheat), 62¢ (corn) and $1.33 (rice). All told, with the rise in prices this meant that the farm value of 20 pounds of wheat became $2.47, corn was $1.92, rice was $2.74. If you ate half of a 1 pound loaf of bread at a meal, and you lose some bran in milling, well, that's 3 meals per day for 6 days or so, for twice as many for 1/4 loaf, etc. Similar for tortillas.
We must understand this globally. For us 20 pounds of rice (220 servings, but call it 200) at $1.33 or up to $2.74 is incredibly cheap, but add in the middle man, and in other countries they might eat much bigger servings.
One solution being proposed is to find ways to lower the farm price of 20 pounds of rice back down to $1.33. The idea is that that's what the rice price should be. There is abundant support for this in corporate agribusiness. Corporate giants like Cargill, ADM, and Bunge fully support lower wheat, corn and rice prices. Tyson (poultry CAFOs) and Smithfield (hog CAFOs) also strongly support it. That means we'll easily have the political clout to make it happen.
Ok, but then the poorest countries of the world are Least Developed Countries, and they are 70% rural. They're farming countries. Were those 2005 prices good for them? Not according to studies of export dumping, exporting these commodities at below the cost of production. The Institute for Agriculture and Trade Policy has documents like WTO Agreement on Agriculture: A Decade of Dumping. USDA-ERS data shows rice prices to have been below full costs of production every year 1982-2006 (25 years). Wheat was below full costs every year 1980-2006 (27 years). For corn it was essentially the same, below full costs every year 1981-2005, except 1996.
For some reason that didn't fix hunger in LDCs? We tried the Cargill, ADM, Bunge plan really really hard for 25-27 years. It seems that, since these are farming countries, as we sort of gave away all of these grains (ie. sold at below our full costs) or subsidized the buyers, we created poverty in the farming countries, like Least Developed Countries.
What's the policy solution? Short term we need to give food aid, but by buying wheat, rice, and corn, for example, at fair trade, living wage prices, from farmers in LDCs, to create wealth and jobs there, and then give it to the hungry there.
Long term we need to fix the commodity Title of the farm bill, the part with farm subsidies. Do progressives say that we should just eliminate subsidies? Then we'd have free markets, free trade, like NAFTA and WTO. That has strong support from Tyson, Smithfield, Cargill, ADM and Smithfield. The Republicans want it.
A better way is the traditional Democratic type of farm bill from the New Deal, and then also supported by Paul Wellstone, Daschle, Harkin and Gephardt in the 1980s farm crisis. Those farm bills had no subsidies. Instead, however, they had price floors and supply reductions (as needed) on the bottom side of price, and price ceilings and reserve supplies to be put on the market if prices rise too high. Today this is found in the Food from Family Farms Act of the National Family Farm Coalition in the US. The ideas are supported by the worldwide peasant movement La Via Campesina, in their policy document and elsewhere (google my blog, “Via Campesina with NFFC: Support for Fair Farm Prices”). They’re also supported by the Africa Group at WTO. (Members are, I think, Algeria, Benin, Burkina Faso, Cameroon, Egypt, Ghana, Guinea, Kenya, Libya, Mauritius, Morocco, Namibia, Nigeria, Senegal, South Africa, Sudan, Tanzania, Uganda, Angola, Botswana, Burundi, Central African Republic, Chad, Cote d'Ivoire, Democratic Republic of Congo, Djibouti, Lesotho, Malawi, Mali, Mauritania, Madagascar, Mozambique, Niger, Rwanda, Sierra Leone, Swaziland, Tunisia, Zambia, Zimbabwe, 21 of these countries are LDCs).
These policies were in place with wonderful fair trade, living wage price levels from 1942-1952. But then corporations called for lowering and eliminating price floors and supply management, so they would profit at the expense of the US losing money one farm exports. About 200 corporations supported this in a 1962 CED report that called for eliminating one third of US farmers in five years, and that was just for one decade. Are progressives surprised to learn that US farmers were outraged at this and opposed it? We fought back back for parity (fair trade, living wage) prices. Farmers still say: “Without clarity on parity all you end up with is charity,” or so-called safety nets. Subsidies partly compensated farmers in rich countries for the massive losses of the US, the dominant farm exporter, choosing to lose money for decades on exports.
That’s the new plan for LDCs: run farmers off the land. Drive down wages in cities. Cheap feedgrains make CAFO meats cheaper than grassfed, so farmers worldwide lose the value added of livestock to CAFOs, so they need no pastures, hay or straw, so that makes even more oversupply and low prices.
Progressives must decide whether to stick with subsidy caps/greening/elimination, under a free market, zero price floor theory, or support NFFC’s FFFA, along with Via Campesina and the Africa Group. So far the corporate side is winning your advocacy.
Corn
1918, $1.45 ($14.40 todays $)
1947 $2.16 ($17.37)
2005 $2.00 ($2.21)
2007 $4.20 ($4.36) food crisis.