Wednesday, October 29, 2008

If You Were an Impoverished Egyptian

Bad news if you were one of the Egyptians rioting over the high food prices this past summer: at first, the credit crisis was good for the poor of developing nations. It lowered food and commodity prices. But now, farmers have reacted, and decided to cut production, and raise prices. So now you're effed. More from Bloomberg (they're on a roll, today)...
"The credit crunch is compounding a profit squeeze for farmers that may curb global harvests and worsen a food crisis for developing countries.

Global production of wheat, the most-consumed food crop, may drop 4.4 percent next year, said Dan Basse, president of AgResource Co. in Chicago, who has advised farmers, food companies and investors for 29 years. Harvests of corn, and soybeans also are likely to fall, Basse said.

Smaller crops risk reviving prices of farm commodities that sank from records in 2008 after a six-year rally that spurred inflation and sparked riots from Asia to the Caribbean. Futures contracts on the Chicago Board of Trade show wheat will jump 16 percent by the end of 2009, corn will rise 15 percent and soybeans will gain 3 percent."