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
|