World scrambles to contain food inflation

[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

Read more: http://au.news.yahoo.com/queensland/a/-/world/8607231/world-scrambles-to-contain-food-inflation/

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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.

“We’re 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.

More: http://www.thejakartaglobe.com/business/burned-by-high-chili-prices-indonesian-government-bets-on-backyard-plants/415500

Even the BBC are reporting on it now: http://www.bbc.co.uk/news/world-asia-pacific-12131170

[CHIMO]

1. World food prices enter 'danger territory' to reach record high

Source: guardian.co.uk

Soaring prices of sugar, grain and oilseed drove world food prices to a record in December, surpassing the levels of 2008 when the cost of food sparked riots around the world, and prompting warnings of prices being in "danger territory".

An index compiled monthly by the United Nations surpassed its previous monthly high – June 2008 – in December to reach the highest level since records began in 1990. Published by the Rome-based Food and Agriculture Organisation (FAO), the index tracks the prices of a basket of cereals, oilseeds, dairy, meat and sugar, and has risen for six consecutive months.

Abdolreza Abbassian, FAO economist, told the Guardian: "We are entering a danger territory." But he stressed that the situation was not yet as bad as 2008.

Sugar and meat prices are at record levels, while cereal prices are back at the levels last seen in 2008, when riots in Haiti killed four people and riots in Cameroon left 40 dead.



Read more: http://www.guardian.co.uk/business/2011/jan/05/world-food-prices-danger-record-high-un

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For a background on what is happening, look up what Jeff Rubin's take on the whole situation is.

[Demeter]

2. Hold on a Minute, there

If it is priced in dollars, then that is of no significance for most people.

The dollar is being devalued by Quantitative Eaing, in which case prices will seem to rise, if priced in dollars...

If it is rising compared to other goods, then it is a significant event.

[CHIMO]

3. Riots

Mean it is rising for most people.

Get with it. It is rising. Which currency are you referencing?

[Demeter]

4. Those riots were two years ago when the dollar still held some value

[CHIMO]

5. Yep

But the prices now are the highest. So we can expect the same thing to follow.

[Psephos]

12. From the FAO website, the index uses international prices in "real" terms.

In other words, based on real purchasing power, not simply a given currency.

Nice analysis tool here: http://www.fao.org/giews/pricetool/

[sfwriter]

15. only if you get more dollar...

if something doubles in price because the dollar is twice as plentiful, and you have the same number of dollars...

I'm unemployed... QE is just a way to shaft me.

[lib2DaBone]

6. I went to supermarket yesterday.. my jaw just dropped open....

Milk.. eggs... produce.. everything thru the roof. And meat? Forgetaboutit.

Add in $4 gasoline to drive 60 miles a day to a minimum wage job with no benefits... 2011 not looking that bright and sunny.

I'm sure Mr. Obama and Wall Street feel the pain.

[dixiegrrrrl]

7. Since food and fuel are NOT in the CPI, Soc. Sec. checks will continue to "shrink".

[FLPanhandle]

8. World population approaching 9 billion.

The seas are overfished and the boom in agriculture from petroleum fertilizers has reached it's peak.

Expect more and more of this.

[Psephos]

11. Actually, it's a little over 7 billion.

See for yourself.

http://www.ibiblio.org/lunarbin/worldpop

[Thor_MN]

9. Try to buy store brand "Nyquil", it doesn't exist anymore

Expect more "Material shortages" making products unavailable at any price

[dixiegrrrrl]

20. We got it here, at Dollar General Store.

NyQuil, day Quil and the Dollar Store ( DG) brands.

[Xenotime]

10. Rethugs will see to it that only the rich can eat.

[howaboutme]

13. Corn ethanol has really helped

enrich a few at the expense of many. I consider it a huge boondoggle that politicians have created that is much more harmful than good and intended to keep the current petro-industrial complex in place. It is a huge contributor to the increase in food prices.

BTW as an aside when will people learn that having too many kids is a sure fire path to poverty for both them and the world?

[provis99]

14. I agree. Subsidized corn ethanol is a disaster.

[glinda]

18. Our Corn Ethanol Plant here in mid-MN. kills almost all the plants at the Landscaping business

next to it. I suspect that is one reason we have few bees also.

[Name removed]

19. Deleted message

Message removed by moderator. Click here to review the message board rules.

[No Elephants]

16. Good luck, disabled and seniors, making it through 2011 on 2007-2008 money

2011 no increase over 2009


2010 no increase over 2009


2009 payment amount based on alleged cost of living in 2007 - 2008.


Whodda thunk cat food would be the good old days?

[glinda]

17. No bees, no fish, Monsanto killer seeds....fun... this will be interesting.

[meow mix]

21. were running out of french fries and burrito coverings nt