Pithaly

Commodity Online
ROME: US president’s controversial remarks on Indian middle class’s food habit seems to have boomeranged on him as the latest FAO data shows consumption by Americans has grown at a much faster rate than Indians.

According to the `global food market report` of the Food and Agricultural Organization, the growth in the cereal consumption in the US was the highest in the world in 2007-08.

The food grain consumption in the US is estimated to have increased to 310.4 million tons in 2007-08 from 277.6 million tons in the previous year, showing 11.81 percent jump.

In contrast, the consumption in India is estimated to have grown by mere 2.17 percent to 197.3 million tons from 193.1 million tons. In China the growth was 1.8 percent to 389.1 million tons from the previous 382.2 million tons. Read more on this article...

Investment newsletters are now featuring headlines like "How You Can Profit from the Global Food Crisis." The recommended investments include agribusiness stocks and exchange-traded funds (ETFs) that speculate in agricultural commodities. These investments will no doubt do very well in the global food crisis; but before you put your money down, you may want to explore whether you will be helping to alleviate the problem or contributing to it. Do you really want to "invest" in starvation? In an April 23 article in the German news source Spiegel Online called "Deadly Greed: The Role of Speculators in the Global Food Crisis," Balzli and Horning note, "Many investors . . . are simply oblivious to the fact that by investing in the global casino, they could be gambling away the daily food supply of the world's poorest people."

The main reason for rising prices, of course, is the surge in demand from China and India.
Hundreds of millions of people are joining the middle class each year, and that means they
want to eat more and better food. A secondary reason has been the growing demand for
ethanol as a fuel additive. That's soaking up some of the corn supply.2

That's the rationale published in the Journal of Wall Street, the financial community that brought you the housing bubble, the derivatives bubble, and now the commodities bubble, producing the subprime crisis, the credit crisis, and the oil crisis. The main reason for the food crisis, says this author, is that the Chinese and Indian middle classes are eating better. Really? Rice has been the staple food of half the world for centuries, and it is hardly rich man's fare. Moreover, according to an April 2008 analysis from the United Nations' Food and Agriculture Organization, food consumption of grains has gone up by only one percent since 2006.3 That hardly explains the fact that the price of rice has spiked by 75 percent in just two months. The price of Thai 100 per cent B grade white rice, considered the world's benchmark, has tripled since early 2007; and it jumped 10 percent in just one week. The fact that corn is being diverted to fuel, while no doubt a contributing factor, is also insufficient to explain these sudden jumps in price. World population growth rates have dropped dramatically since the 1980s, and grain availability has continued to outpace population. Biofuels have drained off some of this grain, but biofuels did not suddenly happen, and neither did the rise of the Asian middle class. If those were the chief factors, the rise in food prices would have been gradual and predictable to match.


Read the whole thing here:

http://www.webofdebt.com/articles/global-food-crisis.php Read more on this article...