World Food Shortage: Pushing Interest Rates Up
World Food Shortage: ;Pushing Interest Rates Up ; "Shortages are emerging in places like India, which has become a net importer of wheat for the first time since 1975. We expect China to become an importer of corn by late 2008." ; ; ; ; ; ; ; ; ; ; ; “Michael Lewis, head of commodities research at Deutsche Bank, said grain prices still had much further to rise” ; Bank of America said in May it raised its European inflation forecast slightly for late 2007 after a hot and dry April, and may have to make further adjustments if "If the weather does not return to a more normal pattern in the next four months..” ; ; ; ; ; ; ; ; ; ; ; “In New Zealand, the central bank cited a 60pc rise in milk prices as the chief reason for the latest increase in interest rates to 8pc.” ; The Economist food commodity index rose by 11 percent (year on year) in 2006 and 15.4 percent (year on year) in April and May 2007. ; ;The result of a combination of robust global demand and weather jitters. ; ; ; ; ; ; ; ; ; ; ; "... persistent 'agflation' ... probably would lead many European central banks to continue to adopt a relatively hawkish tone on monetary policy." - Juergen Michels, euro zone economist at Citigroup ; ; ; ; ; ; ; ; ; ; ; Food prices have not been part of core inflation, but some analysts now argue a steep climb in food costs could last long enough to reconsider this. ; ; ; ; ; ; ; ; ; ; ; Goldman Sachs analyst Jeffrey Currie has argued the current grain rally "is not a transient spike, but rather represents the beginning of a structural increase in prices." ; The USDA predicts world grain supplies will plunge to a 53-day equivalent-their lowest level in the 47-year period for which data exists. ; ; ; ; ; ; ; ; ; ; ; Most important, 2007/08 will mark the seventh year out of the past eight in which global grain production has fallen short of demand. The Canadian National Farmers Union sees this as the opening phase of an intensifying food shortage due to: natural gas and fertilizer constraints, intensifying water shortages, climate change, farmland loss and degradation, population increases, the proliferation of livestock feeding, and an increasing push to divert food supplies ;into biofuels ; In addition to falling grain supplies, global fisheries are faltering - 1/3 of ocean fisheries are in collapse, 2/3 will be in collapse by 2025, and our ocean fisheries may be virtually gone by 2048. ------------------------------------------------------------------------------------ ; Cdn National Farmers Union: ;Food Supplies are Falling http://www.organicconsumers.org/articles/article_5383.cfm ; The USDA predicts world grain supplies will plunge to a 53-day equivalent-their lowest level in the 47-year period for which data exists. ; ; ; ; ; ; ; ; ; ; ; Most important, 2007/08 will mark the seventh year out of the past eight in which global grain production has fallen short of demand. This consistent shortfall has cut supplies in half-down from a 115-day supply in 1999/00 to the current level of 53 days. ; The Canadian NFU Director of Research Darrin ;Qualman.said that the converging problems of: natural gas and fertilizer constraints, intensifying water shortages, climate change, farmland loss and degradation, population increases, the proliferation of livestock feeding, and an increasing push to divert food supplies ;into biofuels means that we are in the opening phase of an intensifying food shortage. ; In addition to falling grain supplies, global fisheries are faltering. Reports in respected journals Science and Nature state that 1/3 of ocean fisheries are in collapse, 2/3 will be in collapse by 2025, and our ocean fisheries may be virtually gone by 2048. ; ; ; ; ; ; ; ; ; ; ; Qualman cautioned, however, that there are no easy fixes. "If we try to do more of the same, if we try to produce, consume, and export more food while using more fertilizer, water, and chemicals, we will only intensify our problems. Instead, we need to rethink our relation to food, farmers, production, processing, and distribution. We need to create a system focused on feeding people and creating health. We need to strengthen the food production systems around the world. Diversity, resilience, and sustainability are key," concluded Qualman. ----------------------------- ; UK Telegraph: ;Global food abundance no longer guaranteed http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/06/13/cncorn113.xml ; "Shortages are emerging in places like India, which has become a net importer of wheat for the first time since 1975. We expect China to become an importer of corn by late 2008." America has switched a fifth of its corn harvest to ethanol (up from 4% in 2000) ;“Corn prices have doubled since the middle of last year, with ripple effects spreading to other crops that compete for scarce land.” “Corn (maize) inventories have fallen to just 40 days' consumption in America.” ; ; ; ; ; ; ; ; ; ; ; ; ; ; “In New Zealand, the central bank cited a 60pc rise in milk prices as the chief reason for the latest increase in interest rates to 8pc.” ; ; ; ; ; ; ; ; ; ; ; “China's food inflation reached 8.3pc in May, with rises of 33pc in eggs and 27pc in meat prices” ; ; ; ; ; ; ; ; ; ; ; “Europe's confectioners are reeling from a 40pc rise in butter prices over the past year” “Food inflation is running at 6pc in Britain, 3.9pc in America, 4.9pc in Australia and 2.5pc in the eurozone.” ; ; ; ; ; ; ; ; ; ; ; “Michael Lewis, head of commodities research at Deutsche Bank, said grain prices still had much further to rise... Fundamentals have been tightening ever since 2001, but now we're hitting critically low levels of stocks. We're seeing very big structural shifts in the world and this is going to make farmland much more expensive in the future" ----------------------------- ; Hot commodities ignite "agflation" fears in Europe http://mparent7777-2.blogspot.com/2007/06/hot-commodities-ignite-agflation.html ; "... persistent 'agflation' -- especially if accompanied by gains in other commodities and strength in global growth -- probably would lead many European central banks to continue to adopt a relatively hawkish tone on monetary policy." - Juergen Michels, euro zone economist at Citigroup ; Red hot agricultural markets are pushing food prices up in Europe, putting central bankers on alert for a new phenomenon economists have termed "agflation". ; ; ; ; ; ; ; ; ; ; ; The result of a combination of robust global demand and weather jitters. Juergen Michels, euro zone economist at Citigroup pointed out in a research note that the Economist food commodity index rose by 11 percent (year on year) in 2006 and 15.4 percent (year on year) in April and May 2007. ; Bank of America said in May it raised its European inflation forecast slightly for late 2007 after a hot and dry April drove wheat from 130 to 150 euros a tonne. ;"If the weather does not return to a more normal pattern in the next four months, we may have to make further adjustments," ; Food prices have not been part of core inflation as their usual temporary nature has meant they have little implication for inflation 18-24 months ahead and in the past have been driven up by short-term supply-side shocks like a bad harvest. ; ; ; ; ; ; ; ; ; ; ; But some analysts now argue a steep climb in food costs could last long enough to reconsider this. ; ; ; ; ; ; ; ; ; ; ; But how much notice the European Central Bank takes of any increase in the cost of food largely depends on whether it views the price rise as temporary or persistent. ; ; ; ; ; ; ; ; ; ; ; Goldman Sachs analyst Jeffrey Currie has argued the demand pull from "food, feed and fuel" means the current grain rally "is not a transient spike, but rather represents the beginning of a structural increase in prices."

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