Food Prices Surge 36 pct

Another 44 million people pushed into poverty

 1.2 billion people living on less than $1.25 a day: World Bank

About 1.2 billion people live on less than $1.25 a day, the World Bank president estimates.

[NOTE: The true figures may exceed 2.5 billion. FIRE-EARTH]

“More poor people are suffering and more people could become poor because of high and volatile food prices,” said Zoellick.

“We have to put food first and protect the poor and vulnerable, who spend most of their money on food.”

So why don’t we?

Food price changes  (Q1 2010 to Q1 2011)

• Maize: 74%
• Wheat: 69%
• Palm oil: 55%
• Soybeans: 36%
• Beef: 30%
• Rice: -2% (Source: World Bank)

Another 30% rise would force 50 more million or so below the extreme poverty line ($1.25 per day), World bank has warned.

World Bank Report Summary: Global food prices have increased substantially since mid-2010, as have prices in many developing countries. In this study we assess the poverty impact of the price changes between June and December 2010 in twenty-eight low and middle income countries. This is done by gathering detailed information on individual households’ food production and consumption levels for thirty-eight agricultural and food commodities to assess the impacts on household welfare. This study estimates that this sudden food price surge increased the number of poor people globally, but with considerably different impacts in different countries. The heterogeneity of these impacts is partly related to the wide variation in the transmission of global prices to local prices and partly to differences in households’ patterns of production and consumption. On balance, the adverse welfare impact on net buyers outweighs the benefits to net sellers resulting in an increase in the number of poor and in the depth of poverty. We estimate that the average poverty change was 1.1 percentage points in low income countries and 0.7 percentage points in middle income countries with a net increase of 44 million people falling below the $1.25 per day extreme poverty line.

Full Report:  Estimating the Short-Run Poverty Impacts of the 2010–11 Surge in Food Prices 

China Drought: Mega Disaster Unfolding

Lifestyle Wars: People Losing to Planet

Human-induced Extreme Weather Causing Food Scarcity, Sending Prices Rocketing

A dying cornfield in Jinan, capital of east China’s Shandong Province, Jan. 18, 2011. (Xinhua/Zhu Zheng). Image may be subject to copyright.

Severe drought threatens wheat crop in China, world’s largest wheat producer: FAO

“Minimal rainfall or snow this winter has crippled China’s major agricultural regions, leaving many of them parched. Crop production has fallen sharply, as the worst drought in six decades, shows no sign of letting up.” Source.

A severe drought has persisted in China’s northern territories for several months. In Hebei province, the farmers haven’t seen any rain for 5 months.

In Henan province the drought control authorities have warned of  prolonged drought.

“East China’s Shandong Province, one of the country’s major grain producers, is bracing for its worst drought in 200 years.” Source.

Shandong has received only 12mm of rain since September 2010.

Water Shortages

A villager said, “The water is no longer suitable for drinking. We wash clothes with it. “

Locals have to fetch water ten kilometers away.

It’s far from enough. Source

How Bad?

Up to 13 million acres of China’s 35 million acres of wheat fields have been affected by the drought. Some 2.6 million people and 2.8 million head of livestock face severe shortages of drinking water, FAO reported.

Rocketing Food Prices

In January, wholesale food prices climbed to their highest monthly figure on record, the UN’s Food and Agriculture Organization (FAO) said.

Why are food prices rocketing?

Droughts and Deluge

• Canada’s planting season was disrupted by floods.
• Australia’s wheat and sugar cane crops were destroyed by mega flooding.
• Russia imposed a ban on exports of wheat after severe drought and wildfires destroyed harvests.

China’s Big Appetite

“China’s grain situation is critical to the rest of the world — if they are forced to go out on the market to procure adequate supplies for their population, it could send huge shock waves through the world’s grain markets,” said Robert S. Zeigler, the director general of the International Rice Research Institute in Los Baños, in the Philippines.

Wheat Futures US cents/bushel

1 month

12 months

Corn Futures US cents/bushel

1 month

12 months

Source: Digital look via BBC. Images may be subject to copyright. Click images to enlarge.

Mother Nature 3 – NZ 0

Electricity Shortages in New Zealand

New Zealand is facing electricity shortages unless sufficient rain recharges its hydro catchments, the government [sic] said.

“Unless we have some increased inflows in the South Island hydro catchments in the next three weeks, further conservation measures will have to be looked at,” the Energy Minister [sic] said.

South Island hydro power facilities provide about two thirds of New Zealand’s electricity. According to a wholesale electricity market operator, storage in hydro-electric lakes is about 40 percent below average. As a result the price of electricity jumped by 30.6 percent to $215.26 per megawatt hour.

Location map of Taupo, New Zealand

In the 2003 power crisis, the government had planned to cut residential hot water supplies, followed by rolling power cuts for residential users, and blackouts.

Rio Tinto’s Tiwai Point aluminum smelter, located in New Zealand’s South Island, consumes about 15 percent of the country’s electricity.

Farm Produce

Earlier this month Bloomberg reported that the prolonged drought in New Zealand, the worst in 20 years, had cut farm production and more than doubled the power prices this year. New Zealand’s energy demand peaks June through August during the hemisphere winter months due to heating use. Hydro-power lakes have been below average since November 2007.

In April 2008, lake Taupo was 18 percent below average. Lake Pukaki was 40 percent below average. Lake Manapouri, which is used to supply Rio Tinto’s Tiwai Point aluminum smelter, was 45 percent below its usual levels.

Continuing drought in New Zealand and Australia, as well as a falling production in the UK and a weak dollar, are raising the prices of milk and dairy products globally. In the past 12 months the price of milk has increased by 32 percent, eggs by 40 percent and wholewheat bread by 26 percent.

Earthquake hit south of Macquarie Island

Meanwhile, in a triple whammy, a 5.9-magnitude quake hit 2100 km (1300 miles) S of Melbourne, Victoria, Australia, earlier today close to a major fault line. Recent increased seismic activities N, NW and SE of New Zealand do not bode well for the country. The earthquakes may result in a period intense volcanic activity in New Zealand in the coming weeks.

Related links:

• NZ govt eyes power-saving measures after dry spell
• New Zealand Rain Fails to Ease Risk of Power Shortage (Update1)
• Volcanoes, Santorini Eruption and Crops Failure in China
• Mt Ruapehu Eruption Alert

santorini

Rising Food Prices and the US-China Trade Imbalance

Rising Food, Fuel and Fertilizer Prices

How expensive must food, oil and fertilizers get before they could turn the tide of China-US trade imbalance AND force the EU economy into major retreat?

Would the breadbasket of the world use the rising prices of grains (cereal crops) as an economic weapon against China and EU?

Related Links:

• Fueling Food Shortages
• Sam’s Club, Costco Ration Rice Amid Hoarding Worries
• Japan: The land of rising . . . err . . . Prices!

• Brazil Lula defends biofuels from growing criticism
• Corn eyes new peaks, may add to food woes
• Bolivia Morales: biofuels serious problem to poor

• Only One Guess Allowed!
• Famous Last words …
• EU needs more pesticides, scientists claim