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Already we have riots, hoarding, panic: the sign of things to
come?
By
Carl Mortished, World Business Editor
07/03/08 "The
Times" -- - The spectre of food shortages is
casting a shadow across the globe, causing riots in Africa,
consumer protests in Europe and panic in food-importing
countries. In a world of increasing affluence, the hoarding of
rice and wheat has begun. The President of the Philippines made
an unprecedented call last week to the Vietnamese Prime
Minister, requesting that he promise to supply a quantity of
rice.
The personal appeal by Gloria Arroyo to Nguyen Tan Dung for a
guarantee was a highly unusual intervention and highlighted the
Philippines’ dependence on food imports, rice in particular.
“This is a wake-up call,” said Robert Zeigler, who heads the
International Rice Research Institute. “We have a crisis brewing
in rice supply.” Half of the planet depends on rice but stocks
are at their lowest since the mid1970s when Bangladesh suffered
a terrible famine. Rice production will fall this year below the
global consumption level of 430 million tonnes.
Street protests and rioting in West Africa towards the end of
last year were a harbinger of bigger problems, the World Food
Programme said. The global information and early warning system
of the Food and Agricultural Organisation (FAO) has monitored
outbreaks of rioting in Mexico, Morocco, Uzbekistan, Yemen,
Guinea, Mauritania and Senegal. There have also been protests in
Jakarta, the Indonesian capital, over government price
increases.Population pressure and increased wealth are mainly to
blame for the resurgence of food insecurity. More people are
eating meat and dairy products in Asia, which increases the
demand on the animal-feed industry. Milk powder prices rose from
$2,000 to $4,800 per tonne last year as rising consumption of
milk products in Asia coincided with shortages in the Western
world. Drought in Australia has worsened the problem as have
government policies in Europe and America to increase the use of
biofuels.
Mounting concern about rice has prompted the Indian Government
to restrict exports of certain varieties. The measure triggered
a surge in global rice prices, which have risen 50 per cent in a
year, according to the FAO. The rice shortage is even felt in
Britain where the price of basmati, the biggest-selling variety,
is rising rapidly.
Wheat is suffering even greater pressures, with prices up 115
per cent in a year. A succession of droughts in Australia has
put upward pressure on the cost of a food commodity that is
already in short supply. Stocks are at a 40-year low and exports
are being restricted from Beijing to Buenos Aires. Ukraine
started closing its door to grain exports in June and Russia set
a 40 per cent export tariff on wheat in January.
Argentina has delayed the reopening of its wheat export registry
until April to protect domestic supplies, and China, a net
exporter of corn, rice and wheat last year, has imposed export
quotas on grain in order to stem runaway food price inflation. A
surge in its inflation index in December was blamed entirely on
rising food prices, notably pork, which rose 48 per cent.
Farmers worldwide are worried about feed costs. In Europe pig
and poultry breeders are threatening to cut production unless
they are paid higher prices.
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