Food prices: “We are entering danger territory”

(9 am. – promoted by DDadmin)

  On the day after world’s price of food hit an all-time high, violence erupted in the streets of Algiers.

ALGIERS, Algeria – Riots over rising food prices and chronic unemployment spiraled out from Algeria’s capital on Thursday, with youths torching government buildings and shouting “Bring us Sugar!”

At no time since records have been kept has the cost of eating been so expensive. The last time prices were this high there were food riots in 32 nations, and that has some people worried.

 “We are entering danger territory,” said the UN Food and Agriculture Organisation’s chief economist, Abdolreza Abbassian.

  Global food prices have risen for the sixth month in succession. Wheat has almost doubled since June, sugar is at a 30-year high, and pork is up by a quarter since the beginning of 2010.

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  So far there hasn’t been widespread unrest, mostly because the cost of rice, the food of the world’s poor, has lagged the rising price of other foods, such as cereals, oils, and sugars.

  But unless the world acts, and acts soon, unrest and violence will surely follow.

 Unlike in 2008, food prices are expected to remain high all year.

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 If you haven’t noticed the rising prices in your local grocery store, there is a reason for it: you aren’t getting as much for your money.

 Household brands ranging from Ivory soap to Kraft cheese singles have seen their packages downsized up to 20% over the last few years – even though shoppers are paying just as much, according to a new study by Consumer Reports.

 It’s a sneaky way of passing along the rising costs, and it may fool people for a little while, but not forever.

 The recent spat of good economic news was exactly what the producers and retailers were waiting for to pass along the cost of rising commodity prices.

 U.S. companies will welcome the opportunity to charge more because they have so far been absorbing higher input costs. The latest prices-paid indexes from the Institute for Supply Management increased in December.

  Indeed, businesses are already expecting to mark up their price lists this year. VF Corp., which makes Lee and Wrangler jeans, and Hanesbrands Inc. have said they will raise apparel prices in 2011 to offset higher cotton prices. A survey released last week by the Kansas City Fed showed that a rising number of regional manufacturers anticipate passing along higher costs to their customers.

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 In the background of all this is high energy prices, where oil traders see $5 gasoline by 2012.

 The rising cost of everything tangible (except housing) is reflected in the general commodity prices.

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 So what is causing all this price inflation? Competitive currency devaluation.

 When one country devalues its currency, others tend to follow suit. As a result, nobody achieves trade gains. Instead, the devaluations put upward pressure on the prices of commodities such as oil.

 It’s the reason why you can’t money print your way to prosperity. There is no free lunch.

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    • gjohnsit on January 6, 2011 at 19:51

    The poor are going to get hit first. Since the poor can’t buy their politicians then they have no choice but to get out in the streets. Starving in silence isn’t an option.

    • TomP on January 6, 2011 at 22:08
    • Edger on January 7, 2011 at 01:38

    they want to create mob violence in the streets?

  1. Go Ben Go! <snark>

    Yet we have asset deflation.

    Who benefits – well, besides Goldman Sachs?

  2. docudharma gets the best of gjohnsit.  The others can suck it.

    • Xanthe on January 7, 2011 at 16:44

    do we have so much packaging.  Those cheese (individually wrapped) slices particularly are wasteful.  Altogether too much material goes in wrapping groceries – wasteful and also an expense.

    The waste is enormous.  

    Another item about the poor – they live in areas where they aren’t clean, large chain stores with sales, etc.  They are forced to pay more because of where they live.  They don’t have cars.

    • banger on January 7, 2011 at 18:09

    on the part of the international oligarchy that the poor are expendable. I think copassion has been gradually going out of fashion–at least that is my read of cultural trends. People will starve and no one will care, particularly in the U.S.

    The desperation of the poor will drive down labor costs and increase arms expenditures making those that count in the world happy. I think competitive devaluation will continue and prices will rise.  

  3. food. There will be the Walmart type store and gas station/seven eleven type stores. Then there will be the traditional stores and supermarkets that will cater to those with discretionary income. I feel it coming in my bones. As population, weather, economics and unstable governments affect food production and distribution, I suspect there will be a slow process to fastfoodification, with the growing poor the recipients of edible scraps packaged in fancy containers. Hello Upton Sinclair.

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