Food Costs Seen Reaching a Record High This Year as Inflation Accelerates
By Tony C. Dreibus
Apr 26, 2011
Global food prices may rise 4.4 percent to a record by the end of the year, driven by demand for meat, oilseeds and grains used to make ethanol, adding to costs that mean inflation is accelerating from the U.S. to China.
The United Nations’ Food Price Index may climb to 240 points from 229.84 last month, said William Adams, a fund manager at Zurich-based Resilience AG, which has $22.2 million of assets. Global corn stockpiles are shrinking the most in seven years, inventories of nine edible oils will drop to the lowest since 1974 and U.S. beef stocks will be the smallest since 1999, the U.S. Department of Agriculture estimates.
“The stockpiles are being severely depleted,” said Adams, who correctly forecast gains in heating oil and gasoline prices last year. “Eventually it gets to the consumer. The U.S. government isn’t subsidizing pork chops like it is ethanol.”