Food

High Inflation Pushes Many to ‘Tipping Point'

Sam Sherraden — Wed, 02 Jul 2008 14:01:00 -0400

According to a report released yesterday by the IMF, high food and oil prices are having a devastating effect on import dependent, small and middle-income countries. Since January 2007, high food prices cost 33 net food importers $2.3bn or .5% of GDP, while oil cost 59 net oil importers $35.8bn or 2.2% of GDP. IMF head Strauss-Khan says many countries are at a "tipping point."

Inflation is driven by the integration of large emerging economies and is expected to continue even as the U.S. economy slows. Oil prices are expected to remain high for years due to the time needed to develop drilling and refining capacity, while food production will increase more quickly due to price incentives.

Snapshot asks, has the IMF done its part to help the world deal with high inflation?

IMF - Price Surge Driving Some Countries Close to Tipping Point
Financial Times – Trade has saved America from recession
Morgan Stanley – The Oil Shock Debate: Recession, Inflation or Both?
Oxford Energy – Why do oil price shocks, no longer shock?

Price of Rice

Sam Sherraden — Wed, 26 Mar 2008 20:30:00 -0400

The price of rice has increased dramatically in the first two months of 2008 according to the Food and Agriculture Organization of the United Nations. Gloria Macapagal Arroyo, the president of the Philippines, recently reached an agreement with Vietnam to guarantee a steady rice supply. Other Asian leaders are also trying to secure their imports. For much of Asia, industrialization has taken precedent over investment in agriculture causing shortfalls in rice production. Factories have taken precedent over rice patties and investment in machinery over research in agriculture.

Snapshot asks, will the rush to industrialize continue to push rice prices higher?

Economist - Empty bowls, stomachs and pockets
Bloomberg - Thailand's Rice Exports Soar on Scarce Supplies
New York Times - Philippines Imports Rice Amid Shortage
Financial Times - WFP plea for $500m to avoid food aid cut
IMF - Coping With Food Price Increases in Sub-Saharan Africa

High Demand for Food Hurts Those In Need

Sam Sherraden — Tue, 26 Feb 2008 16:29:00 -0500

Food prices have risen dramatically during the past year forcing many countries to implement food rationing, price controls, and export bans. The United Nations Food and Agriculture Organization warned that lower income countries, reliant on food aid, will face severe cutbacks in staple items. Supply shortages are partially a result of dramatic increase in demand from countries like Brazil, Russia, India, and China.

Snapshot asks, what can be done to prevent rising demand for food in middle income countries from constraining supply to low income countries?

BBC – UN warns over food aid rationing
OECD – Government support to farmers falls slightly amid higher world food prices
JPMorgan – Food prices reinforce squeeze from energy
Food and Agriculture Organization of the UN – Food Outlook November 2007
Financial Times – Why are food prices rising? VIDEO