Walker’s World: Food crisis again

Tuesday, November 13, 2012
By Paul Martin

by Martin Walker
Nov 12, 2012

Driven by bad wheat and a serious collapse the Siberian harvest, world wheat prices have risen more than 40 percent since January and are once more flirting with the panic prices of 2007 and 2008.

Those price peaks, along with surging oil prices, were critical factors in the world economy’s plunge in recession. The bread shortages and riots that followed the food crisis destabilized countries dependent on food imports like Egypt and helped trigger the Arab Spring.

Oil prices can hurt but they don’t kill. Food shortages, however, are lethal to poor people and to governments. Either one eats or one starves.

It is too soon to say how bad this will get but last year saw the harvest in the United States savagely cut by the worst drought in 50 years. And most of the main wheat producing regions around the world are hitting trouble at the same time.

In Siberia and Central Asia, a combination of drought, forest fires and heat waves have slashed the Russian harvest 33 percent. For Russia, this is the worst crop since the disasters of the 1960s forced them to start spending scarce foreign currency on buying U.S. wheat. The Kazakhstan crop has been halved. This means very little wheat is available for export.

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