Expect price hikes to continue

By Vernon Khelawan
Sunday 13th April, 2008

Bread“We have not seen the last of the rising price of rice.” This is the view of president of the Supermarkets Association of T&T (Satt) Heeranand Maharaj.

“As a matter of fact,” he added, “we can expect continuing price increases in staples like flour, beans and peas. The price of peas for instance, has increased 260 per cent over the last year and the price is expected to move even further upwards.

Maharaj, who demits office as Satt president later this week, explained that contributing factors to this situation include the large acreages of rice lands, which have been converted to corn fields for the manufacture of bio-fuels, and the damaging effects of climate change due to global warming.

He is insisting “immediate and greater attention be paid to the food security of the nation.”

Commenting on the flour issue, Maharaj said National Flour Mills seems to be rationing supplies, because there are so many instances where orders for flour are only being partially filled. “So it seems to be more than a trucking issue,” he added.

To support what Maharaj has said, the Phillipines-based International Rice Research Institute, stated Friday, “Rice prices are set to keep rising as demand for the staple is outstripping production.” Rice is the staple food for about three billion people worldwide.

It stated further that the price of rice had risen by as much as 70 per cent during the past year, with increases accelerating in recent weeks.

The institute has, however, identified different factors contributing to the present crisis of price hikes. Land for producing rice and irrigation water was being lost to industrialisation and urbanisation and there is another phenomenon, some of Asia’s burgeoning urban middle class, especially in India and China, a growing appetite for meat and dairy products, which has led to less land for rice production.
Full Article : guardian.co.tt

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“This is the new face of hunger,” said Josetta Sheeran, director of the World Food Programme (WFP), launching an appeal for an extra US$500 million so it could continue supplying food aid to 73 million hungry people this year.

“People are simply being priced out of food markets….We have never before had a situation where aggressive rises in food prices keep pricing our operations out of our reach.”

The WFP decided on a public appeal three weeks ago because the price of the food it buys to feed some of the world’s poorest people had risen by 55 per cent since last June. By the time it actually launched the appeal, prices had risen a further 20 per cent, so now it needs US$700 million to bridge the gap between last year’s budget and this year’s prices.

Last year it became clear that the era of cheap food was over: food costs worldwide rose by 23 per cent between 2006 and 2007. This year, what is becoming clear is the impact of this change on people’s lives.

For consumers in Japan, France or the US, the relentless price rises for food are an unwelcome extra pressure on an already stretched household budget. For less fortunate people in other places, they can mean less protein in the diet, or choosing between feeding the kids breakfast and paying their school fees, or even, in the poorest communities, starvation. And the crisis is only getting started.

It is the perfect storm: everything is going wrong at once. To begin with, the world’s population has continued to grow while its food production has not. For the 50 years between 1945 and 1995, as the world’s population more than doubled, grain production kept pace – but then it stalled. In six of the past seven years, the human race has consumed more grain than it grew. World grain reserves last year were only 57 days, down from 180 days a decade ago.

To make matters worse, demand for food is growing faster than population. As incomes rise in China, India and other countries with fast-growing economies, consumers include more and more meat in their diet: the average Chinese citizen now eats 50 kilos (110 lbs) of meat a year, up from 20 kilos (44 lbs) in the mid-1980s.

Then there is global warming, which is probably already cutting into food production. Many people in Australia, formerly the world’s second-largest wheat exporter, suspect that climate change is the real reason for the prolonged drought that is destroying the country’s ability to export food.

But the worst damage is being done by the rage for “bio-fuels” that supposedly reduce carbon dioxide emissions and fight climate change. Thirty per cent of this year’s US grain harvest will go straight to an ethanol distillery, and the EU is aiming to provide ten per cent of the fuel used for transport from bio-fuels by 2010. A huge amount of the world’s farmland is being diverted to feed cars, not people.

Worse yet, rainforest is being cleared, especially in Brazil and Indonesia, to grow more bio-fuels. A recent study in the US journal Science calculated that destroying natural ecosystems to grow corn (maize, mealies) or sugar cane for ethanol, or oil palms or soybeans for bio-diesel, releases between 17 and 420 times more carbon dioxide than is saved annually by burning the bio-fuel grown on that land instead of fossil fuel. It’s all justified in the name of fighting climate change, but the numbers just don’t add up.

“It would obviously be insane if we had a policy to try and reduce greenhouse gas emissions through the use of bio-fuels that’s actually leading to an increase in greenhouse gases,” said Prof Robert Watson, former chief scientific adviser to the World Bank and now filling the same role at the Department for Environment, Food and Rural Affairs in London. But that is the policy, both in Europe and in the US.

This is the one element in the “perfect storm” that is completely under human control. Governments can simply stop creating artificial demand for the current generation of bio-fuels (and often directly subsidising them). That land goes back to growing food instead, and prices fall.

Climate change is a real threat, but we don’t have to have this crisis now. “If…more and more land (is) diverted for industrial bio-fuels to keep cars running, we have two years before a food catastrophe breaks out worldwide,” said Vandana Shiva, director of the India-based Research Foundation for Science, Technology and Natural Resource Policy, in an interview last week. “It’ll be 20 years before climate catastrophe breaks out, but the false solutions to climate change are creating catastrophes that will be much more rapid than the climate change itself.”


3 thoughts on “Expect price hikes to continue”

  1. Cheaper flour prices not automatic
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    ALTHOUGH the price of wheat has fallen by at least 40 per cent on the global market, the National Flour Mills is making no guarantees on whether or not the price of flour will decrease for local consumers.

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  2. Perhaps we need to examine once more, what amounts of food it takes to 1. Sustain life, 2. MAintain a healthy life. It is a fact that lean people are healthier, but it is unfortunate that food prices should force leanness on the whole world.

    Everywhere there are high prices. It is no comfort to me, living in the US, to know that gas is twelve cents a gallon in Venezuela, I paid $3.39 today, and filled up my small SUV for $58.00. (I am saving the receipt as an historical marker). In TnT dollars, I filled up my tank for $356.70. Milk and gas are competing for highest price. Milk is $4.00 a gallon, and eggs are nearly three dollars a dozen. Now all of thee prices have risen by one third or more in the last five months.

    There are no shortages, howver, only high prices. Go to any grocery store, and the shelves are packed to the ceiling. Rice,in every variety, flour of every sort-including plantain, rice, corn, barley, yam and chick pea flour is available in abundance.

    Perhaps Trinis travelling abroad this year should travel light, and instead of returning with playstations, i-pods and new cel-phones,and jeans to re-sell, that second suitcase could be filled with foodstuff.

    Or as one German guy in the grocery commented: “Germans drive to work, get home, and park their cars, they are not on the road running everywhere.” I cannot verify this, but I know that I now make a list and plan the route that is least travelled to save gas, and buy my groceries when each of the stores in my area has specials.

    There was always a limit to what we could spend. We did not know it until now. Meanwhile, my bodi is begining to climb up the trellis, and I am staking my tomato plants. Hopefully, the rabbits will let me have some of my veggies. Forget it, in this state, we do not eat the wildlife, except deer. Rabbits and armadillo are not food, nor do we eat the alligators. We may come to that later, but by then, I’d be a vegan.

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