The Food Crisis is Real

10 Jan

‘Afghanistan is appealing to the international community to provide extra supplies of wheat to alleviate a shortage’ the BBC reports and quotes from the country’s Commerce Minister, Mohammad Amin Farhang. In the same article, the price of bread is reported to have increased by more than 100% or four times in certain cases. The causes: Rising grain prices on the international market, the assassination of Benazir Bhutto, leading to reduction in import of wheat from Pakistan and wheat, being smuggled out of Afghanistan to neighbouring Tajikistan.

In Bangladesh, the price of rice has gone up to the extent that it has become a crisis according to the same news agency. Chief of the Army, Gen Moeen U Ahmed blames it on price increase in the global market, increase in transportation costs (due to increase in prices of oil) and catastrophic weather conditions which destroyed the country’s rice crops.

In Pakistan, food prices has also gone up by about 14 percent in 2007, building on double-digit increases for both previous years according to an AP article. Increase in prices of staple foods is blamed on ‘rampant smuggling enabled by the lifting of laws that had banned the movement of wheat across regions’, allowing flour to be sold at higher prices in neighboring Afghanistan and alleged creation of artificial shortages.

To stabilise domestic food prices, China has imposed tighter controls on grain imports into North Korea, which heavily depends on the former for food aid. According to the news article, China has blocked grain exports since late December in 2007 ‘to stabilize domestic food prices’ due to increase in worldwide food prices. The article stated that up to 80 to 90 percent of food aid to North Korea is delivered via Dandung, which is the main route of transport; and that if the blockade continues, ‘North Korea’s food supplies are expected to deteriorate quickly.’ A food crisis is hence imminent in North Korea.

In China itself, rising prices of food and property is causing ‘discontent among the urban poor’. BBC reported that the increase of food and property prices, some, amounting to as much as ‘10% in some cities’ towards the end of 2007; and attributes the main cause to the inability of production supply in countrysides to catching up with demand in wealthy cities.

What then drives the price of food to increase? According to an OECD and FAO (Food and Agriculture Organization of the United Nations) report published in July this year, it is mainly due to the increase in demand for bio-fuels. It also lists other factors such as ‘droughts in wheat-growing regions and low stocks’ to explain for the hike.

As global food prices increases, coupled with increase in oil prices, and effects of climate change affecting growth of crops, food prices are likely to further increase. This will result in inflation globally, but its effects are mostly likely felt in poorer countries and those who depend heavily on aid.

The food crisis is real and it has manifested itself in countries which are experiencing political and social instability. Ending world hunger may and will likely become an acute global problem, especially countries in the South.

===

References:

1. Afghanistan appeals for food aid, BBC, Pam O’Toole, 4 January 2008

2. Bangladesh ‘facing rice crisis’, BBC, 3 January 2008

3. Bhutto’s death a further blow to Pakistan’s economy, AP, 2 January 2008

4. China suspends food exports to N. Korea, Hankyoreh, 5 January 2008

5. Discontent ‘grips Chinese cities, BBC,3 January 2008

6. Growing bio-fuel demand underpinning higher agriculture prices, Joint OECD-FAO report, 4 July 2007

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