Food securityWorld could be in for higher food prices
This has been one of the driest summers in American history, but the weather is not only affecting the United States; weak monsoons in India and other weather issues across the globe are affecting crops and could lead to higher food prices in 2013
This has been one of the driest summers in American history, but the weather is not only affecting the United States. Weak monsoons in India and other weather issues across the globe are affecting crops and could lead to higher food prices in 2013.
“We have had quite a few climate events this year that will lead to very poor harvests, notably in the United States with corn or in Russia with soja,” warned Philippe Pinta of the French Farmer’s Federation (FNSEA).
If this continues, it could lead to the same price increases on food that we saw in 2007 and 2008.
The Bangkok Post reports that one of the determining factors will be in India, where a weak monsoon season could lead to food inflation. Monsoon rains were 15.2 percent below average in mid-August and Asian rice prices are due to increase by as much as 10 percent in the coming months.
Kuruppasserry Varkey Thomas, the Indian food minister, thinks that if these conditions do not change it “could affect the crop prospects and may have an impact on prices of essential commodities.”
The UN Food and Agricultural Organization (FAO) is a bit more optimistic about the situation. They expect rice output to surpass the “excellent results” recorded last year even as the FAO cut its global forecast for production of unmilled rice to about 725 million tons from 732 million.
According to Japanese meteorologists, the world is dealing with the onset of the El Nino weather phenomenon, which gave it a natural warming effect. It is active in the western pacific and is expected to last until the winter in the northern hemisphere.
In the United States the issues is corn production as the continued drought in the Midwest has had a huge effect. Corn production is probably at the lowest level in six years, the U.S. Department of Agriculture said, and curtailed production will likely send corn and soybean prices to record highs.
The Post notes that the drought affecting corn in the United States has hit so hard that FAO director general Jose Graziano da Silva of Brazil called for the United States to suspend biofuel production programs to ease the pressure on food resources.
“An immediate, temporary suspension” of a mandate to reserve some crops for biofuels “would give some respite to the market and allow more of the (corn) crop to be channeled towards food and feed uses,” he wrote.
Concerns over the U.S. harvest have caused senior G20 and United Nations officials to consider an emergency meeting on food supply, and a conference call has been scheduled for next Monday according to the Financial Times, which cited officials as saying, however, that the talks were not a sign of panic, but rather the result of the need to establish a consensus to avoid the same riots and tensions that were sparked in 2007-8 by spiking food prices.
Major concerns include hoarding or export restrictions by food producing countries, along with panic buying by others.