Rising food prices eating into economies

This is written by my boss Mustapha Kamil, the executive editor of Business Times.

Perhaps the world has been focusing too much on the rise and fall of stock and property prices around the globe and the erratic potential for accumulation of wealth that comes with the wild swings lately, that governments seem to be missing another potentially devastating issue, the increasingly limited access to one of human's most basic of necessities -- food.

Analyses and reports coming from around the globe paint 2011 as possibly a year when the world starts to live dangerously in as far as food would be concerned.

In a nutshell, the analyses point out grim prospects for the world if nothing is being done now. It seems all around the globe food is either falling increasingly short in supply or be-yond reach of many because of spiralling prices. It seems a lot more people will go to bed hungry from this year on and a lot more will die either of effects of malnutrition or simply of hunger.

Projections made based on current data don't seem promising at all. On the one hand, the supply situation is not expected to improve anytime soon and on the other, the number of mouths to feed around the world increases sharply by the day. It is projected that the world population will reach some 9 billion by 2050, from about 6.9 billion now and from the presently mounting challenges faced by food producers, it is very likely that starvation would become more widespread.

Even with a population of about 6.9 billion now, the imbalance between supply and demand is already driving food prices sky high in many parts of the world. The picture is even gloomier if the currently erratic global weather pattern and natural disasters are taken into account.

The United Nations in a recent report predicted a global new record high for food early this year and that prices will increase 30 per cent more by the end of the year. According to the US Department of Agriculture, the country's corn reserves will drop to a 15-year low by the end of 2011 but an anticipated severe drought in China will make it necessary for the country to import nine times more corn that what the US initially expects it would.

At the same time, Russia which is a large producer of wheat has begun to import the commodity as high temperatures experienced in the summer of 2010 had devastated much of the crop.

In short, there will be a mad scramble for food, a phenomena that will surely drive prices even higher.

The question is, who will feed the poorer nations? Statistics show that someone somewhere will starve to death every 3.6 seconds now and 75 per cent of those are children under the age of five.

The world is really struggling to feed itself and ultimately it will have to face the sorry prospect of having to decide who gets to eat and who shall starve.

Starvation, too, could lead to a host of other challenges. There was a direct relation between the recent riots that brought the Tunisian government down and the high prices and short supply of food in the country.

In Egypt, spiralling cost of living largely brought about by imbalances between what the Egyptians take home and what they have had to pay for basic necessities including food was one of the factors that drove them to the wall and eventually revolted against their government, despite after living 31 years in fear under former President Hosni Mubarak's iron-fisted rule.

A hungry population is also likely to become a desperate lot. Governments of the world must take notice of this threat for it could have a far more devastating impact than any property bubble burst or stock market collapse.

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