Best of the Week
Most Popular
1.U.S. Housing Bull Market Over? House Prices Trend Forecast Current State - Nadeem_Walayat
2.The Coming U.S. Economic Collapse Will Trigger a Revolution - Harry_Dent
3. Stock Market Crash a Historical Pattern? - Wim_Grommen
4.Global Panic - U.S. Federal Government Stockpiling Ammo – Here’s What We’re Going to Do - Shah Gilani
5.AI, Robotics, and the Future of Jobs - Aaron Smith
6.This is Your Economic Recovery With and Without Drugs - James_Quinn
7.Gold and Silver Price Getting Set To Explode Higher - Austin_Galt
8.The Something for Nothing Society - Lifecycle of Bureaucracy - Ty_Andros
9.Another Interesting Stock Market Juncture - Tony_Caldaro
10.Inflation vs the Deflationary Straw Man - Gary_Tanashian
Last 5 days
Russia, Ukraine War - It’s Time to Play the “Gazprom Card” - 29th Aug 14
The One Tech Stock Investment You Should Never Sell - 29th Aug 14
Bitcoin Price $500 as Current Downside Barrier - 29th Aug 14
Don't Get Ruined by These 10 Popular Stock Market Investment Myths - 29th Aug 14
Low Cost Transcontinental Gold - 29th Aug 14
Gold Bullish Central Banks Should Give Money Directly To The People - Helicopter Janet? - 29th Aug 14
US House Prices Bull Market Over? Trend Forecast Video - 29th Aug 14
The Fed Meeting at Jackson Hole Exposed Yellen’s Greatest Weakness - 29th Aug 14
AAPL Apple Stock About To Get sMACked - 29th Aug 14
A History of Unlimited Money: Learn From It or Repeat Its Mistakes - 29th Aug 14
How You Can Play to Win When Market Makers Are Calling the Shots - 28th Aug 14
EU Gas Supply Is In Real And Imminent Danger - 28th Aug 14
Central Banks at the Root of Evil - 28th Aug 14
European Bond Market: Bubble of all Bubbles! - 28th Aug 14
Employers Aren’t Just Whining: The “Skills Gap” Is Real - 28th Aug 14
The ISIS Menace - Just What We Need, Another War - 27th Aug 14
The Risky Business of Methane-Rich “Fire Ice” - 27th Aug 14
CFR Recommends Policy Shift that is Very Bullish for Gold - 27th Aug 14
Ukraine Standoff Signals Global Power Shift - 27th Aug 14
Stock Market Panic Decline Begins - 27th Aug 14
The Monopoly of the Government Education Cartel - 27th Aug 14
How to Invest in Silver Today for Double-Digit Gains - 27th Aug 14
The Big Solar Energy Breakthrough We've Been Waiting For - 27th Aug 14
U.S. Empire’s Bumpy Ride - 27th Aug 14
Gold Market and the Interest Rate Trap - 27th Aug 14
Stock Market Staring Into the Great Abyss - 27th Aug 14
A Look at the Coming 30-year Inflation Cycle - 27th Aug 14
Forex Trading - Will USD/CHF Rally Above 0.9200? - 27th Aug 14
Europe’s Depressing Economy Dog Days of Summer - 27th Aug 14
How The Coming Silver Price Bubble Will Develop - 26th Aug 14
A Nation of Shopkeepers - Supply-Side (Voodoo) Economics? - 26th Aug 14
Stock Market Bear Tracks Abound In Wall Street - 26th Aug 14
65,000 U.S. Marines Hold up a Mirror to the Economy - 26th Aug 14
Bitcoin Market Provides Clues for Investors - 26th Aug 14
The Key to Trading Success - 26th Aug 14
Will The US Succeed in Breaking Russia to Maintain Dollar Hegemony?... - 26th Aug 14
Even Mainstream Academia Worried about Massive Bubbles in Markets - 26th Aug 14
Iraq and Syria Follow Lebanon's Precedent - 26th Aug 14
Colonization by Bankruptcy: The High-stakes Chess Match for Argentina - 26th Aug 14
Dow Stock Index On The Cusp - 26th Aug 14
Prohibition Laws and Agency Regulations - 26th Aug 14
Will Canadian Regulators be Able to Avoid Final Fatal TSX Venture Exchange (TSX-V) Crash? - 25th Aug 14
HUI Gold Mining Stocks Elliott Wave Projection - 25th Aug 14
Stock Market Uncertainty Resolved With New High - 25th Aug 14
Go Forth Multiply And Replenish The Earth - 25th Aug 14
Dollar Dumping: When Actions Speak Loudest - 25th Aug 14
A Plethora of Currency, Stocks and Precious Metals Chartology - 25th Aug 14
Why Isn’t Fed Monetary Pumping Helping the U.S. Economy? - 25th Aug 14
Myths About Money and Inflation - 25th Aug 14
The Fed Will Raise U.S. Interest Rates in March 2015 - 25th Aug 14
Gold Price Manipulation Still Alive - 25th Aug 14
The Ebola Outbreak: U.S. Sponsored Bioterror? - 24th Aug 14
Instigating War in Europe - Understanding Ukraine in 15 Minutes - 24th Aug 14
LNG Catalysts About to Hand You the investment Opportunity of the Decade - 24th Aug 14
Another Interesting Stock Market Juncture - 24th Aug 14
The West Set Up the ISIS Endgame - 24th Aug 14
Gold And Silver Low Prices Are NOT The Reason To Own Precious Metals - 24th Aug 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Biggest lie in Stock Market History Revealed

Food Crisis Doomsday Scenario as Prices to Shoot Through the Roof

Politics / Food Crisis Aug 31, 2010 - 08:52 AM GMT

By: Pravda

Politics

Best Financial Markets Analysis ArticleThe worst weather on record coupled with the practice of speculation in the commodities markets are set to send food prices skyrocketing, bringing misery and starvation to large swathes of the world’s population. Are we set to see food riots this winter?

In the USA, Walmart has already announced a price hike of 5.8% on average for a 31-item basic basket for this Autumn. The long-term rise, however, is far more frightening, with the UNO predicting an increase of 60 per cent by 2030.


What is happening?

When there is a massive price spike, such as the case in recent years, followed by more price rises (as is the case today) the markets panic and speculative buying sends the prices through the roof. The market economy system is indeed not all about supply and demand but is also, and fundamentally, fuelled by speculative trading, with spot buyers buying future positions of commodities. When they are scarce, and the more so when the market senses that a scarcity exists, the price goes up.

This is what is happening today. September corn is up by 3.6% a bushel, wheat by 34 cents. In July the price of wheat shot up by the highest quantity in the last 50 years: 42 per cent. This in turn will push up prices of pasta, bread and cereals in the near future.

Prices set to rise for 12 to 18 months

Analysts predict upward trends in wheat, corn, soybeans, bean oil and bean meal and the general feeling is a continued rising trend over the next 12 to 18 months. As usual, no mechanisms have been activated to protect the world’s poorer populations from the dramatic effects of supply issues and the resulting speculation in prices.

Global production downturn

Russia reports a drop in production of around 20 per cent due to dry weather conditions. Drought has also affected Ukraine (where maximum production is set to reach just 66% of domestic demand) and Kazakhstan, while floods have affected 13 million acres of cereals in Canada and have wiped out a large part of China’s harvest. Germany’s wheat production is ten to twenty per cent down on 2009; in Argentina dry conditions mean that only 80% of the arable land for cereals has been planted.

The S word: Speculation
In today’s market economy system, what drives the prices is not only supply and demand but also the S word: Speculation, where a handful of players push prices sky high and way beyond the reaches of the pockets of the average consumer. If the system were based upon supply and demand then the price of soybean would be bearish (top-down attack, falling), because the main producers (Brazil, Argentina and the USA), have had a good harvest. Then why is the price of soybean bullish (bottom-up attack, rising)?

Because cash premiums are forcing the soybean futures rates higher as a process of over-consumption of soybean is noticed in the marketplace (soybean is present these days in most foodstuffs and other consumable items). So much so, that the price of soybean would have to rise a further 50 to 80% to curb the current demand.

And it makes sense for this to happen…and that is going to affect the price of everything we eat.

Couple this with the rising cost of transportation (crude and natural gas prices are set to rise from September) and we see our comfortable little monetarist-oriented market economy system has engendered another fine crisis looming on the horizon. Watch this space.

Vast swathes of the planet are set to go hungry. Those who were previously hungry may starve. It is the Doomsday Scenario and it is upon us. And it is caused not by the lack of supply or scarcity of abundance. It is caused by this manic, inhumane system, the S-word, Speculation.

Timothy BANCROFT-HINCHEY

Pravda.ru

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Pravda Archive

© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014