tag:blogger.com,1999:blog-19649274.post4260454840015208079..comments2024-03-29T12:03:50.891+05:30Comments on The Leap Blog: What happened to global food prices?Ajay Shahhttp://www.blogger.com/profile/03835842741008200034noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-19649274.post-69007425040243739762011-09-25T16:42:22.693+05:302011-09-25T16:42:22.693+05:30Alternatively, if these shocks were not anticipate...Alternatively, if these shocks were not anticipated in 2000-2005, then the future outlook had to be benign, which led to a rational drawdown of inventory,..<br /><br />I have to thank you such an article.james watthttp://www.sewarumahsederhana.com/noreply@blogger.comtag:blogger.com,1999:blog-19649274.post-91827418776282811242009-01-10T21:59:00.000+05:302009-01-10T21:59:00.000+05:30hey,My name is Daniel Limon and i'm represnting In...hey,<BR/>My name is Daniel Limon and i'm represnting India in the Israel and Middle East Modle UN. If anyone could help me I would like to know more about Indias policies on rising food prices.<BR/>Thanks,<BR/>my email is daniellimon@gmail.comUnknownhttps://www.blogger.com/profile/17823322528148402481noreply@blogger.comtag:blogger.com,1999:blog-19649274.post-49549768705046961462008-09-08T22:55:00.000+05:302008-09-08T22:55:00.000+05:30what a great analysis, and very enjoyable too!Chee...what a great analysis, and very enjoyable too!<BR/><BR/>Cheers,<BR/>AbishekAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-19649274.post-90226214905523524172008-08-01T19:43:00.000+05:302008-08-01T19:43:00.000+05:30Great analysis but beg to differ - the two major p...Great analysis but beg to differ - the two major producers and consumer of food grain in the world India and China are more or less shielded from this price signaling effect. Check out my post on this issue here http://cyberhitchhiker.blogspot.com/2008/07/whats-driving-worlds-food-price.htmlMostlyharmlesshttps://www.blogger.com/profile/11505067302869076629noreply@blogger.comtag:blogger.com,1999:blog-19649274.post-4126473621463695982008-05-28T02:36:00.000+05:302008-05-28T02:36:00.000+05:30Rising food grain problem is not to for this curre...Rising food grain problem is not to for this current year. It will become more severe in the coming years. So government should take some steps which will benefit India farmers and also the world economy.<BR/><BR/>As the prices of the food grain is growing because of the gap between demand and supply. Government should take necessary measures to provide farmers with adequate loans and equipments and encourage them for farming. As most of the farmers are selling there land to private builders for the better short term gain. If the price on which government procure grains is increased every year as per international market standards. Than I think it will encourage more and more farmers to opt for growing food grain rather than selling there land to builders.<BR/><BR/>Government should take some strong actions on this issue at this moment itself, so that it can make India developed state for agriculture related products.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19649274.post-11639369634483152032008-05-23T21:23:00.000+05:302008-05-23T21:23:00.000+05:30I find it interesting that in most discussions of ...I find it interesting that in most discussions of this type, the subject of population growth rate in a finite world is seldom included. The driving forces are population growth and people getting richer (thanks for an excellent analysis on the elasticity as a function of wealth) and sooner or later finite land area and water supply will create a supply demand problem where minor supply issues can decrease price stability. <BR/><BR/>There is a photosynthetic efficiency limit that scientists can't get us past. You can't violate the laws of thermodynamics. This limits the yields per hectare.Dallas Weaverhttps://www.blogger.com/profile/09699534047200583908noreply@blogger.comtag:blogger.com,1999:blog-19649274.post-62826065664302892812008-05-18T22:56:00.000+05:302008-05-18T22:56:00.000+05:30I believe much of what was written is correct. Ho...I believe much of what was written is correct. However, there are a few other issues afoot that push "hopeful" to a whole new level.<BR/><BR/>The US is STILL paying farmers to NOT plant. We are also paying ethanol producers subsidies to turn corn into a useless fuel.<BR/><BR/>Should the US suddenly eliminate both subsidies, the prices of foodstuffs would drop precipitously as cattle feed would be suddenly widely available, unused land was suddenly planted, and the deficit suddenly reduced (helping to keep interest rates lower).<BR/><BR/>The US government is doing much to create this undersupply and fueling the speculators who are making much use of the arbitrage. In addition, speculators have been keenly aware of the weakening US dollar, and the value this puts on exporting US foods to other nations. Rice is becoming less and less a staple food in Asia as wheat products become more widely available....due to a weak dollar and plenty of US foods to ship. This puts plenty of upward price pressure on food stocks.<BR/><BR/>I think the analysis is excellent, and with some minor tweaking to account for things like subsidies and the weak dollar, it makes much more sense.<BR/><BR/>Speculators are NOT the only player in the market, and I happen to believe speculators even out prices over time, reducing spike impacts. However, when there is a vast reduction in supplies, and pressure to keep those supplies low (subsidies) in light of increased demand, speculators get to play the arbitrage game with the weak dollar. So they do have some role.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19649274.post-29499893093950105142008-05-16T01:20:00.000+05:302008-05-16T01:20:00.000+05:30Thanks for the interesting post. I would like to a...Thanks for the interesting post. I would like to add a slightly different story about the source of current price increases that emerges from analyses by the International Food Policy Research Institute (http://www.ifpri.org/). <BR/><BR/>The combination of new and ongoing forces is driving the world food situation and, in turn, the prices of food commodities. One emerging factor behind rising food prices is the high price of energy. Energy and agricultural prices have become increasingly intertwined. With oil prices at an all-time high of more than US$100 a barrel and the U.S. government subsidizing farmers to grow crops for energy, U.S. farmers have massively shifted their cultivation toward biofuel feedstocks, especially maize, often at the expense of soybean and wheat cultivation. About 30 percent of U.S. maize production will go into ethanol in 2008 rather than into world food and feed markets. High energy prices have also made agricultural production more expensive by raising the cost of mechanical cultivation, inputs like fertilizers and pesticides, and transportation of inputs and outputs.<BR/><BR/>At the same time, the growing world population is demanding more and different kinds of food. Rapid economic growth in many developing countries has pushed up consumers' purchasing power, generated rising demand for food, and shifted food demand away from traditional staples and toward higher-value foods like meat and milk. This dietary shift is leading to increased demand for grains used to feed livestock. Poor weather and speculative capital have also played a role in the rise of food prices. Severe drought in Australia, one of the world's largest wheat producers, has cut into global wheat production. <BR/><BR/>More on rising food prices and what can be done: http://www.ifpri.org/pubs/bp/bp001.aspAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-19649274.post-88652455587398279022008-05-15T00:28:00.000+05:302008-05-15T00:28:00.000+05:30Nice model. However, I question the extent to whi...Nice model. However, I question the extent to which people have reached the price insensitive category. The number of extremely poor is declining fairly rapidly, and all of those people are now moderately poor. It seems to me that this group should now provide more price elasticity than earlier. In comparison, it's much harder to move into the category where price fluctuations really don't matter. Even in the US, I believe many people are probably eating less meat due to higher food prices.Greghttps://www.blogger.com/profile/11625686639473177247noreply@blogger.comtag:blogger.com,1999:blog-19649274.post-91481632915608416632008-05-14T17:30:00.000+05:302008-05-14T17:30:00.000+05:30Really thought provoking.. However, not sure if th...Really thought provoking.. However, not sure if there is neccesary a co-relation between speculation and food inventories. Futures contracts can be "cash-settled", can't they? (Or are global food-futures markets delivery only?) In a cash-settled contract, the futures seller need not have underlying wheat stock. Speculative ability would then require capital inventory rather than food inventory.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19649274.post-12166791518281344652008-05-14T11:46:00.000+05:302008-05-14T11:46:00.000+05:30Anon, your scenario won't really work for price ta...Anon, your scenario won't really work for price takers like, say, wheat farmers. One is likely to switch crop based on future direction of crop price - say, corn instead wheat to be used in ethanol rather than to hoard by producing less.<BR/><BR/>The great disservice the government is doing is eliminating that future price signal. If the ban continues into summer more wheat plantation during kharif crop, to be planted in June monsoon, may not materialize. Desi farmers and consumers will be the losers and foreign growers will grow rich thanks to imports....Chandrahttps://www.blogger.com/profile/04763671243428875888noreply@blogger.comtag:blogger.com,1999:blog-19649274.post-21656822073874281252008-05-11T18:53:00.000+05:302008-05-11T18:53:00.000+05:30Ajay,That's really interesting. A question for you...Ajay,<BR/>That's really interesting. A question for you, does all futures contracts register as inventories in the chart? or is what annon here suggested a possibility?<BR/><BR/>thanks<BR/>Deane.Deanehttps://www.blogger.com/profile/11858835286985736348noreply@blogger.comtag:blogger.com,1999:blog-19649274.post-13162271208906309752008-05-11T11:44:00.000+05:302008-05-11T11:44:00.000+05:30Really good analysisSohamReally good analysis<BR/><BR/><BR/>SohamAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-19649274.post-88533167312925538632008-05-11T08:57:00.000+05:302008-05-11T08:57:00.000+05:30You base your arguments about the lack of speculat...You base your arguments about the lack of speculation on the stored capacity of food. However, one of the ways to speculate or 'hoard' food is to not produce it at all. That is produce less in a year so that you can produce more next year. Statistics tell us that the acerage of food has gone down. <BR/><BR/>Now, I don't know the extent to which you can produce less in one year to produce more next year. But there is a feeling that this is part of why it is going on.Anonymousnoreply@blogger.com