December 4, 2007
More riots and hunger feared as demand for grain sends food costs soaring
Riots and malnutrition are feared to increase in the next two years as the global supply of grain comes under more pressure than at any time in 50 years, according to one of the world's leading agricultural researchers.
Joachim von Braun, head of the International Food Policy Research Institute as quoted by British daily The Guardian says that recent pasta protests in Italy, tortilla rallies in Mexico and onion demonstrations in China are "just the start of the social instability to come unless there is a fundamental shift to boost production of staple foods."
The growing appetite of China and other fast-developing nations has combined with the expansion of biofuel programmes in the United States and Europe to transform the global food situation.
The past year saw a sharp rise in the cost of wheat, rice, corn, soy and dairy products after decades of robust crop yields.
von Braun, whose organisation is the world's largest alliance of agricultural researchers, economists, and policy experts, says demand is running away and the world has been consuming more than it produces for five years now.
Stocks of grain - of rice, wheat and corn - are down at levels not seen since the early 80s, he said.
So far, crises have been averted because states have eaten into national stocks, but this could be set to change because China, in particular, has run down its supplies.
He said the next 12 to 24 months we are in a fairly risky situation as large consuming nations, particularly China, will feel pressed to enter international markets to bid up prices to unusual levels.
Thanks to its manufacturing prowess China has huge foreign exchange reserves and could buy the global food crop several times over. But its consumers are already feeling the cost of food inflation. According to the local media three shoppers died last month in a stampede at a supermarket in Chongqing that was offering cheap rapeseed oil. The threat of instability has prompted prime minister Wen Jiabao to make the fight against food price rises one of his government's priorities. So far it seems a losing battle.
Economic growth - estimated at 11.5 percent in the first nine months of the year - has made Chinese consumers wealthier, while urbanisation and globalisation has changed their diet. In October the government announced pork prices were up more than 50 percent, vegetables 30 percent and cooking oil 34 percent compared with the year before.
The quandary is felt across the world. In Britain and other rich nations it means a few more pence for breakfast cereal in the short term and a slightly higher cost for toys, clothes and other China-made goods. But for the world's poorest communities the increases will have a potentially devastating effect.
Cyclone-devastated Bangladesh has to ask for half a million tonnes of food aid - a severe blow to the pride of a country that had been trying to wean itself off international assistance. Bangladeshi officials say the price of cooking oil - of which it imports 1.2 million tonnes a year - has almost tripled in the past two years because it is now valued as an alternative to diesel oil. More worryingly, their main staple of rice is hard to buy at any price because India, Vietnam and Ukraine have cut exports.
Added to this are the pressures caused by global warming, which have been blamed for the droughts that damaged crops in Australia and other parts of the Europe this year.
The social tensions caused by rising food prices are already evident such as the tortilla riot which saw 70,000 people marching off the streets, says von Braun. He exclaimed that for a year or two countries can stabilise with stocks. But the risk comes in the next 12 to 24 months as poor countries that cannot afford to buy will be the losers, while those with huge foreign exchange reserves will bid up the world market.
Von Braun called on Europe to reconsider its biofuel policies, to provide more aid to poor nations, to keep markets open and to boost production.
