|US drought could trigger repeat of global food crisis, experts warn|
|Thursday, 26 July 2012|
America's drought threatens a recurrence of the 2008 global food crisis, when soaring prices set off riots and unrest to parts of Africa, the Middle East, and Latin America, food experts warn.
Corn prices reached an all-time high last Friday, as the drought expanded across America, trading at $8.24 a bushel on the Chicago exchange. Soybeans were also trading at record levels.
The US department of agriculture meanwhile predicted there would be less corn coming onto global markets over the next year, because of a sharp drop in US exports.
America is the world's largest producer of corn, dominating the market. Corn is also connected to many food items – as feed for dairy cows or for hogs and beef cattle, as a component in processed food – expanding the impact of those price rises.
That means the effects of the drought will travel far beyond the mid-western states baking under triple-digit temperatures, said Robert Thompson, a food security expert at the Chicago Council of Global Affairs.
"What happens to the US supply has an immense impact around the world. If the price of corn rises high enough, it also pulls up the price of wheat," he said.
He went on: "I think we are in for a very serious situation worldwide."
Some analysts are predicting a repetition of the 2008 protests that swept across Africa and the Middle East, including countries like Egypt, because of food prices.
In 2008, the food shock was due to rising prices for rice and wheat. This time, it's because of corn and soybean, and there were no signs of shortfall in rice or wheat production.
But the full effects of the American drought will likely take several months to emerge. Its severity will be determined by a number of additional risk factors....
The Guardian: Read the full article
US drought could cause global unrest
Twice in the last five years, rising food prices triggered global waves of social unrest. With drought baking U.S. crops, another round of soaring, society-straining price spikes may happen in coming months.
According to researchers from the New England Complex Systems Institute, commodity speculation — investors betting on food prices — will amplify the drought’s market signals, creating a new food bubble and the crises that follow.
“The drought is clearly going to kick prices up. It already has. What happens when you have speculators is that it goes through the roof,” said NECSI president Yaneer Bar-Yam. “We’ve created an unstable system. Globally, we are very vulnerable.”
The ongoing drought, the United States’ worst since the Dust Bowl, is expected to last until October and will decimate U.S. harvests. America is the world’s largest exporter of corn, wheat and soy beans; global prices for those commodities have already surged to record levels.....
Wired Science: Read the full article