Food price crisis looms
Just a few weeks ago traders were expecting a bumper food crop in 2012, and prices were low. But now a 2008-style food crisis is just around the corner – threatening cities across the globe with social unrest and starvation.
Weird weather, coupled with rampant commodity price speculation, low levels of strategic stockpiling and increases in the price of agricultural staples such as corn, soyabeans and wheat, have created a volatile cocktail. Wheat and corn prices are soaring for the third summer in five years, and the prospect of another price shock is with us once again.
The US drought is the main reason that soybeans are at record prices. And the heatwave currently threatens the US grain harvest. Any further occurence of extreme weather – be it cold or wet or super-hot could tip the global economy into crisis.
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