Apr 14, 2008

What's driving up food prices?

Jehea thinks the casuses are:
  1. Global shifting of diet: Shifting to meat consumption, which requires more grains, causes shortage in food for people.
  2. Increased interest to biofuel issues
  3. Demand for grains is increasing.
  4. Climatic conditions: Recent droughts in Australia, Central Europe, and many other places in the world.
  5. Low stocks: Growing grains tend to be seasonal and time consuming. Therefore the stocks tend to be quite low.
  6. Crisis in Financial Markets: Illiquidity created by the crisis in financial market makes investment difficult. As a result, investment is not reached to the community which concentrates in agriculture. Therefore, harvest is not expected.

Sources:

Robert Zoellick, President of World Bank, Opening Press briefing at the WB-IMF meetings 2008.
Davao Norte farmers rue high costs, low gains from farming, By Frinston Lim Mindanao Bureau, Inquirer.net, April 06, 2008

1 comment:

Mindy said...

Also, increased production in biofuels converts farms into fuel plants– which cuts crop supply. PLUS, at the same time, biofuel production is also responsible for almost half the increase in the demand for food crops.