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Turborama Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-06-11 11:20 AM
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World scrambles to contain food inflation
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Edited on Thu Jan-06-11 12:03 PM by Turborama
Source: Reuters

Neil Fullick and Peter Apps, Reuters
January 7, 2011, 12:34 am

SINGAPORE/LONDON (Reuters) - Record high food prices are moving to the top of policymaker agendas, driven by fears it could stoke inflation, protectionism and unrest and dent consumer demand in key emerging economies. The United Nations' food agency (FAO) said on Wednesday that food prices hit a record high last month, moving beyond levels of 2008 when riots broke out in countries as far afield as Egypt, Cameroon and Haiti.

In Asia, official data and analyst estimates both pointed to inflationary pressures. Chilli prices have increased fivefold in Thailand in the last year and Indonesia's president called for households to plant food in their own gardens. President Susilo Yudhoyono Bambang told a cabinet meeting people should be "creative" in planting, with Trade Minister Mari Pangestu leading the way in planting at home. "I have 200 chilli plants in flowerpots," Pangestu told a briefing on Thursday. "The agriculture ministry is informing farmers how to take care of the plant and also encouraging consumers to plant chilli in their own yards."

Surging food prices have often provoked unrest in urban areas of poor countries, where imported food often makes up a high proportion of household purchases. Analysts say African and Caribbean economies dependent on food exports could be particularly hard hit, helping stoke unrest and potentially pushing governments toward imposing export bans and expropriating foreign-owned farmland.

If Asian and other emerging consumers have to spend more of their income on food, other purchases will fall -- and that could be bad news for a global economy that has placed much of its hopes for recovery on consumption in


The chili crisis is major news in Indonesia. It's like what happens when gas prices rise in the States. I was in the obstetrician's waiting room earlier this week and the local news channels were doing special reports etc.

Here's the latest from The Jakarta Globe...

Burned by High Chili Prices, Indonesian Government Bets on Backyard Plants

Dion Bisara, Camelia Pasandaran & Armando Siahaan

Jakarta. Facing a global spike in food prices and public protests over the skyrocketing cost of chilies, the government on Thursday vowed to stabilize the market but said consumers must also do their part to tackle inflation, including planting peppers in their yards.

Were going all out to maintain price stability for food because prices continue to rise, with extreme weather the main cause, Hatta Rajasa, coordinating minister for economy, said at the Finance Ministry on Thursday.

We are finalizing two regulations that we hope can strengthen our capacity to deal with extreme weather. They will be finished by the end of this month.

Harvests last year were damaged by the La Nina weather phenomenon, which caused heavy downpours throughout the dry season, reducing supplies and contributing to higher prices.


Even the BBC are reporting on it now:
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