In early September the world price of wheat rose to over $400 a tonne, the highest ever recorded. In May it had been around $200. Though in real terms its price is far below the heights it scaled in 1974, it is still twice the average of the past 25 years. Earlier this year the price of maize (corn) exceeded $175 a tonne, again a world record. It has fallen from its peak, as has that of wheat, but at $150 a tonne is still 50% above the average for 2006.Comment: Bad news for the billion people trying to live on less than a dollar a day, or the couple of billion trying to live on between one and two dollars a day!
A lot of these folk are subsistence farmers, but if they have a bad crop (more likely with our climate changes) they will have a hard time buying food. I bet food aid will also go down, as there are smaller surpluses and the cost of food is higher.
Indeed, the increasing cost of food will hit the urban consumer. That in turn is bad news for political stability.
On the other hand, rural incomes may go up, especially for those communities and countries that have made the transition to commerical agriculture. It will be interesting to see the overall effects of high food prices. JAD
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