Resources Research

Making local sense of food, urban growth, population and energy

Grain and poverty, Russia and India, yet another UN talkfest, and those damned bankers

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Many young male adults have left their villages in search of subsistance means after the poor raining season in 2009 prevented them from harvesting. In the village of Garin Dagabi, north of Tanout in Southern Niger, the population at the beginning of 2010 was mainly made of old people, women and children. Photo: © Anne Isabelle Leclercq/IRIN

Many young male adults in Southern Niger have left their villages in search of subsistance means after the poor raining season in 2009 prevented them from harvesting. Anne Isabelle Leclercq/IRIN

At the United Nations headquarters in New York, USA, a large gathering of country representatives and other interested folks is the signal that another interminable, obfuscatory, filibustering, mostly spineless and generally pointless meeting is under way.

It is called the 19th Session of the UN Commission on Sustainable Development. The well-coiffeured ladies, impeccably suited gentlemen, minor potentates and ‘development’ celebrities there will be arguing endlessly about the grammar and construction of the declarations they finalise so as to ensure that no-one commits to anything and that they all meet again as soon as possible to check on their progress at doing nothing noisily.

Naturally, they are beatifically unconcerned about nuisances such as rising food prices and crippling food inflation all over the world. If you want to punish yourself by wading through portentous paragraphs of high-minded gibberish, and get a taste of the UN’s legendary core competency – wasting our money on pomp and prolix puffery – go here.

Now that we can see the difference between the posers at UN HQ and the rest of the toiling masses, here are some indicators of the way the world food, agriculture and prices are moving in the summer of 2011.

Agriculture in Africa. Photo: FAOThe Wall Street Journal has said that expectations of surplus grain in Russia and India are driving speculation that the two producers might resume exports, as wheat prices soar. But deteriorating prospects for US and European wheat crops mean even the return of exports from Russia and India to world markets this year would be unlikely to lower prices.

Grain dealers in Russia are starting to move stocks to ports in the hope that the government will allow exports as early as July. The Kremlin banned exports last year after the worst drought in a century slashed Russia’s grain harvest by about a third to about 63 million metric tons, but hopes that farmers may reap as much as 90 million tons this year have prompted calls for an end to the embargo.

Even if the exports from these producers happen, said the WSJ report, they are unlikely to make up for a fall in output in the US and Europe. The impact of weather on wheat supplies has been fueling prices for the past 10 months, with the latest concerns about dryness stressing crops in the ground and excessive rainfall hindering planting in the world’s two largest exporters. Wheat prices have rallied more than 60% on the Chicago Board of Trade since June 30.

Thou Market, southern Sudan. Across the Sahel, women generate income from balanites seeds, which are about half oil and a third protein. After processing at home, they can be turned into many tasty items, including roasted snacks and a spread not unlike peanut butter. They also supply a vegetable oil that is a prized ingredient in foods as well as in local cosmetics. (From 'Lost Crops of Africa: Volume III: Fruits', The National Academies Press. Photo: Caroline Gullick)

Thou Market, southern Sudan. Across the Sahel, women generate income from balanites seeds, which are about half oil and a third protein. After processing at home, they can be turned into many tasty items, including roasted snacks and a spread not unlike peanut butter. They also supply a vegetable oil that is a prized ingredient in foods as well as in local cosmetics. (From 'Lost Crops of Africa: Volume III: Fruits', The National Academies Press. Photo: Caroline Gullick)

World rice production is forecast to rise 3% this year, according to a Bloomberg report quoting the FAOs’ Rice Market Monitor. This is based on expected better weather and government support for farmers. The 2011 rice harvest is estimated to climb to 720 million metric tons from 699 million tons, or 480 million tons on a milled basis compared with 466 million tons a year earlier, the FAO has said in report. Price gains for rice, a staple for half the world, have trailed those of other grains. Thai grade-B white rice has gained 6% in the past 12 months, compared with a 56% gain for Chicago wheat prices.

A business report in the Huffington Post highlights the conclusions of a very readable piece of journalism in the magazine Foreign Policy (written there by Frederick Kaufman). The primary danger of the indexes is that they fundamentally alter the food market by transforming key stapes into a financial asset that performs more or less like a stock. “The money tells the story,” the Foreign Policy article explained. “Since the bursting of the tech bubble in 2000, there has been a 50-fold increase in dollars invested in commodity index funds. To put the phenomenon in real terms: In 2003, the commodities futures market still totaled a sleepy $13 billion. But when the global financial crisis sent investors running scared in early 2008, and as dollars, pounds, and euros evaded investor confidence, commodities — including food — seemed like the last, best place for hedge, pension, and sovereign wealth funds to park their cash… In the first 55 days of 2008, speculators poured $55 billion into commodity markets, and by July, $318 billion was roiling the markets. Food inflation has remained steady since.”

In a report titled ‘Food Price Hike Worsens Poverty in Asia’, IPS news has reported that an annual meeting of Asian finance ministers and central bank governors in Hanoi is set to address the fate of 64 million people in the region on the brink of extreme poverty. They are the worst affected by soaring food prices, which have hit record highs in the first two months of this year. “The issue of food price inflation and food security will indeed be one of the key topics of discussion at the Asian Development Bank’s 44th annual meeting,” says Xianbin Yao, director general of the regional and sustainable development department at the Manila-based international financial institution. “(We hope) to focus our discussions on the long term structural adjustments that are needed to secure food supplies.

“If left unchecked, the food crisis will badly undermine the recent gains in poverty reduction made in Asia,” he said in an interview to IPS. “We estimate that a 10% rise in domestic food prices in developing Asia could push an additional 64 million people into poverty, based on the 1.25 (dollar) a day poverty line.” In a report released ahead of the annual meeting in the Vietnamese capital, to be held May 3-6, the Asian Development Bank (ADB) warned that this ascent of prices among many Asian food staples is “likely to continue” a threat to the continent’s nearly two billion people who live on less than two dollars a day.

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