It now seems likely to be one of the most tragic and inevitable global trends for 2011: food riots.
People are burning stores in India, Chili, China, Egypt, and Algeria.
The recent overthrow of the Tunisian dictator was about a lot of things, including corruption and unemployment, but it was also about food prices too. Protest signs in Tunis included examples like, “WE WANT bread and water and no Ben Ali.” Some protesters waved loaves of bread to emphasize their point.
Food price protests have spread even to oil-rich Oman.
Meanwhile, governments are taking desperate measures in the face of soaring prices.
India has banned the export of onions after vegetable prices have risen 70% in the past year. China is implementing price controls and building up a strategic supply of foodstuffs. South Korea is lowering import tariffs on food. Many arab governments are resorting to tax cuts and hand-outs to defer popular protests.
The scary thing is that everyone expects food prices to keep increasing.
Beef and pork prices are at record highs, but, if forecasts prove accurate, consumers have only just begun to see higher prices for food and fuel.
Steady increases in the costs of grain and energy since last fall are drawing comparisons to the summer of 2008, when corn and soybean prices set a record and gasoline topped $4 a gallon, said Purdue University farm economist Chris Hurt.
Unlike in 2008, however, grain prices are up before the first seeds go into the ground, and fuel costs are rising well ahead of the spring-summer driving season.
The key question is “why”? Why is food price inflation suddenly so high?