Posted on 04/02/2008 12:17:56 AM PDT by bruinbirdman
Governments across the developing world are scrambling to boost farm imports and restrict exports in an attempt to forestall rising food prices and social unrest.
Saudi Arabia cut import taxes across a range of food products on Tuesday, slashing its wheat tariff from 25 per cent to zero and reducing tariffs on poultry, dairy produce and vegetable oils.
On Monday, India scrapped tariffs on edible oil and maize and banned exports of all rice except the high-value basmati variety, while Vietnam, the world’s third biggest rice exporter, said it would cut rice exports by 11 per cent this year.
The moves mark a rapid shift away from protecting farmers, who are generally the beneficiaries of food import tariffs, towards cushioning consumers from food shortages and rising prices.
But economists warned that such actions risked provoking an upward spiral in global food prices, which have already been pushed higher by rising demand from emerging markets like China and India and pressure on land from the growing production of bio-fuels.
“There are so many speculators in the market that when something happens to affect supply, there is an immediate reaction,” said Paul Braks, commodities analyst at Rabobank, one of the largest agribusiness lenders.
“Markets are very tight, and when you see net exporters imposing these export restrictions to stabilise domestic food prices, it makes the market nervous.”
Mr Braks said volatility in food prices had been exacerbated by problems in financial markets. “The credit crunch has pushed a lot of investors into commodities as a safe haven,” he said. “If they get their fingers burned, they are likely to withdraw.”
Kamal Nath, Indian trade minister, said food shortages were becoming one of the most pressing trade issues. “It is ... probably our number one problem,” he said. “World food stocks have never been lower.”
India, which became self-sufficient in food in the 1970s, has imported substantial quantities of wheat and other staple foods over two years in response to shortages and higher prices.
Mr Braks said that even highly productive exporters such as Ukraine were imposing export restrictions on wheat, though a good harvest in the autumn should see more grain being released on to the world market.
In the medium term, high prices should encourage more land to come into production, particularly in Ukraine and Russia. “World grain prices are likely to be high and volatile over the next two crop years, and then from 2010 the supply response should start to bring prices slowly down,” he said.
Disputes over sharing the costs and benefits of higher food prices have shot up the political agenda in many developing countries as sharp reductions in purchasingpower, particularly for the urban poor, have put increasing pressure on governments.
Global rice prices have risen by a third since the turn of the year, and higher soyabean costs have sparked protests in countries such as Indonesia.
In Argentina, farmers have protested against attempts by the government of Cristina Fernández to redistribute the benefits of rising commodity prices by increasing export taxes on soyabeans and other crops. In the Philippines, government investigators have raided warehouses suspected of hoarding rice.
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Looks like the Sauds want to starve us out. How can a farmer not sell foreign if he gets a higher return.
It seems that China and India are to “blame” for much of the economic angst across the world. So much for a “rising tide lifting all boats”. Seems to me we were better off when those countries were Third World.
No blood for wheat Saudis!
It seems that China and India are to “blame” for much of the economic angst across the world. So much for a “rising tide lifting all boats”. Seems to me we were better off when those countries were Third World.Ding ding ding. Economics isn't a zero sum game, but raw materials to a great extent *are*. This may be what "rolls back" the globalism of the last 30 years.
Probably hording it like gold.
yitbos
Not here. We’re going to make an assload of money out of this.
Ethanol insanity plus higher oil prices equal disaster for poor countries. Something like this could destabilize the entire world. But it’s a small price to pay for saving the earth.
If your conscience approves of starving millions per year, and your pocket book likes expensive shoes, I guess you're right!
>>>Rush to restrict trade in basic foods
This isn’t news. Limbaugh has been on a diet for years, he says.
“Starving millions” in the third world aren’t my fault. The blame lies squarely at the feet of third world dictators. My conscience is clear.
Trade restrictions implemented at the behest of protectionists that result in the starvation of millions should be on the conscience of the protectionists.
But if protectionists and ethanol producers can sleep while millions starve so that they can feel good about “Buying American,” and “Energy Independence,” have at it.
You’re right: Dictatorship often causes starvation.
Too little trade in agricultural goods can starve people too.
The Greenies would sign that sentiment in a heartbeat. Anything that saves the world while pushing people off it, they're for.
Why?
Because of the cost of oil and speculation in the commodities market.
Mark my word, big time money folk are putting this into play right now.
And higher commodities prices are a good thing for third world farmers as well.
Cutting taxes makes things more affordable?
I don't know about that. Very, very fishy.
/demthink off/
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