Going up: food prices set to soar by Richard Webb. The Sunday Age, Melbourne. April 3, 2011
“Higher world prices for commodities such as wheat and sugar will place pressure on related food prices”, says the Reserve Bank of Australia. With global food prices at record highs, a supermarket war isn’t enough to keep prices down…
…In Europe, rising food prices are cited as one of the main reasons why the European Central Bank may lift interest rates at its meeting this week despite growing debt problems among the PIIGS (Portugal, Italy, Ireland, Greece and Spain).
Countries such as Algeria and Saudi Arabia have been stockpiling wheat and Bangladesh and Indonesia rice to enable them to contain panic buying, inflation and social unrest, while Russia and Ukraine have introduced grain export restrictions. In India, food price inflation is running at an annual 15 per cent and the price of onions has doubled in a year, while Pakistan has stopped some exports of onions to India in a bid to tame its own onion prices.
The rising cost of food is a huge problem in China, helping push annual inflation to 4.9 per cent in February as workers move from rural areas to the cities and lift their living standards and basic food consumption (particularly protein).
Richards Webb’s article cites the IMF food price index which is available on the web:
Rising Prices on the Menu by Thomas Helbling and Shaun Roache. Finance and Development, March 2011, Vol. 48, No. 1. (PDF version available, also see their references section for more information)
AROUND the world, poor weather has reduced harvests and driven up food prices, fueling inflation risks and hitting the most vulnerable. Floods in Australia, Pakistan, and parts of India have helped push up the cost of food, as have droughts in China, Argentina, and Eastern Europe. Energy prices are again on the rise, with likely knock-on effects for food.
Readers can also turn to earlier GMO Pundit Posts, such as: