Thursday, August 12, 2010

Disasters could push food prices up

Common Dreams via Al-Jazeera: Fires, floods, locusts and droughts - a combination of crises that could mean higher food prices around the world over the next 12 months. The US agriculture department will release a report on Thursday assessing world grain supplies. Many analysts expect it will forecast a two-year low for wheat inventories - an estimate that would likely send wheat prices, which have climbed steadily all summer, moving even higher.

Russia, the world's third-largest wheat exporter, imposed a four-month ban on grain exports last week because of drought. That decision will pull millions of tonnes of wheat out of world markets: Russia had originally planned to increase its exports this year, to more than 40 million tonnes.

The World Bank has urged other nations not to follow suit, fearing a supply crunch like the one that drove 2008 prices to twice their current levels and prompted food riots in Africa and Asia. At least one country is not listening, though. Severe winter frosts and a summer drought have damaged the crop in Ukraine, the world's sixth-largest exporter, and Kiev is expected to impose its own export ban later this month.

In Australia, the government is forecasting a 22.1mn tonne crop, slightly larger than last year's. But there are persistent fears that locusts could destroy two or three million tonnes; and western Australia is suffering from a drought, threatening much of the region's crop.

Other countries have had smaller-scale problems: In northern Afghanistan, for example, a plague of locusts has already destroyed much of the wheat crop in Samangan province. Argentina is one of the few global bright spots. The US agriculture department predicted on Tuesday that Argentina would export 8 million tonnes of wheat over the next year, a one-million-tonne increase over preliminary estimates….

A wheat field, shot by 3268zauber, Wikimedia Commons, under the Creative CommonsAttribution-Share Alike 3.0 Unported license

1 comment:

Anonymous said...

Ukraine is a recent WTO member, meaning that they're very unlikely to ban exports and are will also do everything they can not to impose import quotas. Ukraine's strive for Westernization, as well the recently approved $15bn IMF loan (distributed in tranches upon certain conditions), further hint that Ukraine will not implement any drastic policies. Recent reports suggest their crop harvest hasn't suffered much at all anyway, they'll still be exporting unless the heat wave continues into August (which isn't the expectation).