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Sunday, 28 October 2012

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Major hunger crisis looms large:

Global food supply in danger zone

World grain reserves are so dangerously low that severe weather in the US or other food-exporting countries could trigger a major hunger crisis next year, said a report by John Vidal in The Observer [1] on October 13, 2012. John cited a UN warning. The food crisis is growing in the Middle East and Africa.

The report said: Failing harvests in the US, Ukraine and other countries this year have eroded reserves to their lowest level since 1974. The US now holds in reserve a historically low 6.5 percent of the maize that it expects to consume in the next year.

"We've not been producing as much as we are consuming. That is why stocks are being run down. Supplies are now very tight across the world and reserves are at a very low level, leaving no room for unexpected events next year," said Abdolreza Abbassian, a senior economist with the Food and Agriculture Organisation (FAO).

With food consumption exceeding the amount grown for six of the past 11 years, countries have run down reserves from an average of 107 days of consumption 10 years ago to under 74 days recently. Prices of main food crops such as wheat and maize are now close to those that sparked riots in 25 countries in 2008. FAO figures released this week suggest that 870 million people are malnourished and the food crisis is growing in the Middle East and Africa. Wheat production this year is expected to be 5.2 percent below 2011, with yields of most other crops, except rice, also falling.

The figures come as one of the world's leading environmentalists issued a warning that the global food supply system could collapse at any point, leaving hundreds of millions more people hungry, sparking widespread riots and bringing down governments. In a shocking new assessment of the prospects of meeting food needs, Lester Brown, president of the Earth Policy Institute in Washington D C, says that the climate is no longer reliable and the demands for food are growing so fast that a breakdown is inevitable, unless urgent action is taken.

"Food shortages undermined earlier civilisations. We are on the same path. Each country is now fending for itself. The world is living one year to the next," he writes in a new book.

According to Brown, we are seeing the start of a food supply breakdown with a dash by speculators to "grab" millions of square miles of cheap farmland, the doubling of international food prices in a decade, and the dramatic rundown of countries' food reserves.

This year, for the sixth time in 11 years, the world will consume more food than it produces, largely because of extreme weather in the US and other major food-exporting countries.

Consequences

Oxfam recently said that the price of key staples, including wheat and rice, may double in the next 20 years, threatening disastrous consequences for poor people who spend a large proportion of their income on food.

In 2012, according to the FAO, food prices are already at close to record levels, having risen 1.4 percent in September following an increase of 6 percent in July.

"We are entering a new era of rising food prices and spreading hunger. Food supplies are tightening everywhere and land is becoming the most sought-after commodity as the world shifts from an age of food abundance to one of scarcity," says Brown. "The geopolitics of food is fast overshadowing the geopolitics of oil."

His warnings come as the UN and world governments reported that extreme heat and drought in the US and other major food-exporting countries had hit harvests badly and sent prices spiralling. "The situation we are in is not temporary. These things will happen all the time. Climate is in a state of flux and there is no normal any more.

"We are beginning a new chapter. We will see food unrest in many more places. "Armed aggression is no longer the principal threat to our future. The overriding threats to this century are climate change, population growth, spreading water shortages and rising food prices," Brown says. Another report [2] on global wheat and corn stocks said: World wheat stocks will drop by 13 percent next year and corn stocks will also be lower than expected until well into 2013, the US government predicted on October 11, 2012, prior to farm ministers from across the globe meeting to discuss high food prices.

It was the second time in two weeks that the US agriculture department (USDA) delivered low estimates of crop stocks to the markets. This time, the USDA said unrelenting demand would drag down US corn and soybean stocks to the lowest levels in years - 17 years for corn and eight for soybeans.

Larger

Agriculture ministers will be meeting in Rome amid renewed fears of a crisis in food supplies exacerbated by the worst US drought in more than 50 years, and drought in Australia, the world's leading wheat exporter. On the US markets, corn futures soared five percent on the USDA's forecasts, hitting a three-week high. Wheat futures were up two percent near the close of the trading day in Chicago and soybeans were up 1.6 percent . While at high levels, corn is about 10 percent lower and soybeans 15 percent lower than the records set during the summer.

The USDA's estimates of the US corn and soybean crops were slightly larger than traders had expected, although the smallest in recent years. Corn and soybeans are raw ingredients in processed foods, fed to livestock and converted to motor fuel. Livestock feeders say they are being ruined by high corn prices and so the US government should relax a requirement to mix corn ethanol into gasoline. With US corn production down for the third year in a row, usage will be tightened tremendously. Exports are forecast at 1.15bn bushels in 2012-13, the smallest in 37 years.

Five years ago, the figure stood at 2.4bn bushels. Meanwhile, corn imports are forecasted to be 75m bushels, three times larger than average. The USDA also cut its estimate of the EU corn crop by 2.6 percent.

Drought will reduce Australia's wheat crop to 23m tonnes, down 12 percent from a month ago, the USDA said. Harsh weather, including summer droughts and early frosts, cut an additional three percent from Russia's wheat crop, it said.

The USDA added that while global wheat stocks would be down 13 percent next year, world soybean inventories would be up, boosted by huge crops in Brazil and Argentina, which would offset the crash is US.

Rebecca Smithers and Fiona Harvey reported [3] the UK food price scenario that shows hardship of common persons in a developed country: According to a survey by charity IGD ShopperVista which showed that price is crucial in determining product choice, with 41 percent of shoppers naming it as the most important factor and 90 percent listing it within their top five influences.

- Third World Network Features

 

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