food prices soar globally…creating investment opportunities
while “experts” and media pundits are busy trying to explain why financial speculation is not to blame for rising food prices, food riots are beginning to become troublesome around the world, and have caused one government to collapse so far, with the mubarak regime standing on shaky ground in egypt. meanwhile…there’s money to be made!
On Thursday, the UN Food and Agriculture Organization said food prices have reached their highest level since it began measuring them in 1990, and pointed to the political problems that can spark.
“Not only is there a risk, but there have already been riots in some parts of the world because of rising prices,” FOA chief Jacques Diouf said.
There is little relief in sight, say experts.
Federal Reserve Chairman Ben Bernanke addressed criticisms at the National Press Club in Washington, answering challenges about record-high food and oil prices
The Fed chief’s comments at the National Press Club in Washington came on the heels of an announcement from the United Nations that global food prices rose for the seventh straight month in January. The UN’s food-price index now stands at its highest level in its 21-year history. Oil prices, meanwhile, have jumped above $90 per barrel in recent days.
One questioner focused on the Fed’s possible role in driving food prices and whether those rising prices have fueled social unrest in the Middle East.
Bernanke said that factors other than food prices may be playing a role in the protests in Egypt and elsewhere, and that global food prices are rising mainly because of trends in emerging markets.
“I think commodity prices are going to be trending higher,” said Gerard Lyons, chief economist for Standard Chartered Bank.
“What’s interesting is that even commodities that aren’t heavily traded are rising in price. … That suggests this is fundamental, not speculators,” he told AFP.
The 2008 commodity spike was only a handful of food grains plus oil, and driven in large part by political decisions amounting to hoarding and heavy trader speculation.
By MARTIN KHOR
FOOD prices across the world have soared to their highest ever level, even exceeding the previous peak levels in mid-2008 before the recession caused by the global financial crisis dampened the prices.
The food price inflation is causing concern in many countries, as access to food is important for social stability.
The last time prices shot up to such high levels, in 2008, there were riots in many countries.
The soaring prices also contributed to the discontent that led to the current protests in Egypt and elsewhere in the Middle East, according to the World Food Programme.
“In many of the protests, demonstrators have brandished loaves of bread or displayed banners expressing anger about the rising cost of food staples such as lentils,” said its executive director Josette Sheeran.
In January, the average price of food items globally rose to its highest ever recorded level, according to the Food and Agriculture Organiosation.
The FAO’s food price index increased for the seventh month running, up by 3.4% from December 2010.
By Harvey Jones
Agriculture is different from other commodities in one key respect: Rising food prices can lead to “demand destruction,” which could mean people starve. They can also bring down governments.
Exchange-Traded Funds have been blamed for encouraging speculation in food prices, but Rogers says the problem has been overstated. “Grain isn’t like gold,” he says. “You can’t just take it off the market. It needs to be consumed. It also needs to be stored, which adds up to 12% to the cost. With an ETF, you are paying a very significant storage premium, so it is expensive. There is also the big risk of investing after the cycle has peaked.”
Agriculture could add some beef to your portfolio, but be warned: Your investment fortunes can change with the seasons.
here are some previous posts i’ve made about this subject:
by John Vidal
The same banks, hedge funds and financiers whose speculation on the global money markets caused the sub-prime mortgage crisis are thought to be causing food prices to yo-yo and inflate. The charge against them is that by taking advantage of the deregulation of global commodity markets they are making billions from speculating …
in addition to the continued mass die-offs of birds and fish around the world, the big news stories for today are rising hunger in the U.S., and flooding across the southern hemisphere… Contrary to the opinion that our economy is on a booming trajectory to the moon, the following chart from the USDA Food and …
while media pudits attempt to explain away what is happening – as financiers make speculative investements in food commodities. Food skyrockets to highest prices ever Source: Natural News Figures recently released by theFood and Agriculture Organization(FAO) index of 55 food commodities indicates that worldwide food prices hit a record high in December. Though the costs …
it’s not like it hasn’t happened before. financial speculators buy up food commodities, hoping prices will rise. if prices do rise, there is no incentive to sell. the longer demand is greater than supply, prices will rise. eventually, someone will sell, and prices will stabilize. this, from arab news… Food riots: Algeria may be the …
the ruling powers are out to kill people…and profit from it!
there are numerous stories and blogposts lately which detail the many, many ways that fabulously wealthy corporations and their government lackeys are actually, actively promoting the deaths of human beings. so long as there are profits to made, it makes sense to financiers and their media pundits. first up, Ken Sayers, from the daily censored …