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Blog item: Peak Oil and the Food Crisis

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0 comments   Add a comment   Author:  newculture (Apr-17-2008)    Play a Video
Categories: Economic/Financial, Population Growth and Control, Sustainable Living

Basic food prices continue to rise - rice has triple in cost in the last few yearsA worsening global food crisis is highlighting the unsustainability of our global economic system.

The food crisis appears to be mainly related to a rapid increase in the global price of food, especially grains such as corn, wheat and rice.

Rising prices, in a free market, are due to a difference between the rate of increase in supply and demand. In this case, demand for food is rising. At the same time, the supply of food is not rising as quickly OR the supply of food may even be declining.

There are three major factors leading to increased global demand for grain.

  • There are about 77 million more humans this year than last year.

  • There is increasing demand for meat and dairy, leading to increasing numbers of livestock, which leads to increased purchases of grain for feed.

  • There is increasing demand for biofuels (especially ethanol), leading to increasing purchases of grain to convert to fuel.

In addition, the grain supply is decreasing as countries such as Indonesia and Kazakhstan have banned food exports.

Does the price of oil directly impact the price of food? We know that the price of oil is determined at auction on the NYMEX. Is the price of grain is also determined at auction? This appears to be the purpose of the Chicago Board of Trade.

Update 4/17 - Corn, Soybeans Rise on 'Buying Panic' to Avoid Food Shortages

If the price of grain is indeed set at auction, then a doubling in the price of oil would not necessarily mean that the price of grain would also double. In the case of rising fuel prices at the same time as stagnant food prices, the farmer might not make a profit when it comes time to sell the grain.

This is not to say that the rising price of oil is not impacting the price of food. This is a question that is very important to explore, because the prices of food and energy are the prices that determine the state of the global economy, and indeed, the state of our very lives.

Articles on Food Price Increases and a Few on Oil
Bangladesh workers riot over soaring food prices - Definitely read this one!
Supply and Demand (and Price)
UN addresses food production, poverty and rising prices
Surging oil and food prices fuel global inflation
Haiti PM ousted over soaring food prices
Dominican Government braces against rising food prices
Why is our food costing so much?
Exploding food prices cause worldwide panic
After the Oil Crisis, a Food Crisis?
Surging costs of groceries hit home
More Fun with Food and Oil Prices
Will Food Get Expensive as Oil Prices Increase?
Starvation Story in Japan
Peak Oil Debunked in Four Easy Words
Managing Surging Oil Prices in the Developing World - How countries are subsidizing oil

4/17 - Inflation is everybody's problem
4/18 - Rice Gains to Record on Concern Trade Curbs to Spread - Are reducing or may reduce food exports (which will lead to less supply), Egypt, India, Thailand, China
4/18 - France warns climate change driving war, hunger

Notes
In Bangladesh, the issue of food is related to the issue of the sale price for textiles or garments. A question is, why are these workers paid so poorly that they don't even have enough money to buy the cheapest food to keep themselves fed?

* Textile - any material made of interlacing fibers or pressing fibers together
* Animal fibers - hair or fur (wool, cashmere, mohair, camel hair, angora, etc.) and cocoon (silk);
* Plant fibers - grass, rush, hemp, sisal, coir, straw, bamboo, pulpwood trees, cotton, rice, nettle, flax, jute, modal, pina, ramie, tencel;
* Synthetic fibers - polyester, aramid, acrylic, nylon, spandex, olefin, ingeo, lurex
* Mineral fibers - asbestos, basalt fiber, glass fiber, metal fiber
          Source on textiles: Wikipedia - Textile

Source: http://valuesystem.livejournal.com/32141.html  
  
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About author/contributor Member: newculture (Aaron Wissner) newculture (Aaron Wissner)
   Web site: http://localfuture.org/

Member: newculture (Aaron Wissner) Aaron Wissner is a teacher, educator, organizer and guest speaker. He is a graduate of the University of Michigan, with emphasis on mathematics, science, and education. Mr. Wissner has taught and consulted for sixteen years in public school, in areas ranging from mathematics, science, computers, to leadership and television news production. He is the founder and organizer of the grassroots Local Future Network, a non-profit educational outreach organization dedicated to saving Earth through culture change.
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