Rising food prices

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Rising food pricesPDFPrintE-mail
World
Wednesday, 24 October 2007 03:03

Food prices increase around the world due to increasing demand and natural disasters such as floods and droughts. What is significant is that the trend is global and affects not only poor countries, though they are hit the most, but also economical powers such as Russia and China.

Countries around the world are battling this effect by reducing border taxes hoping to ease rallying prices. China and Russia went even further and have frozen some prices. This is especially significant in case of Russia as it clearly resembles old communist times where there was poverty and food rationing. Today it is not due to desperate situation (yet?) but due to coming elections to Duma, russian parliament. President Putin does not want to loose votes because of soaring food prices. 

"Jacques Diouf, director-general of the UN’s Food and Agriculture Organisation, said surging prices for basic food imports such as wheat, corn and milk had the “potential for social tension, leading to social reactions and eventually even political problems”.

Mr Diouf said food prices would continue to increase because of a mix of strong demand from developing countries; a rising global population, more frequent floods and droughts caused by climate change; and the biofuel industry’s appetite for grains."

If problem exists already, when world economy is generally doing well, then what happens in the future when last days come and amounts of food are drastically cut due to disasters?

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