Aalan88:
Commodity prices are global, not national.
Definitely agree.
I
came across an article that lists some reasons for high global food
prices. It's not a complete list and you'd do better getting the
USDA's report on food prices. But it's worth mentioning that
biofuels is only one of many factors. Here are the factors
mentioned:
-- High energy and fertilizer prices
-- Declining US dollar
-- Drought in big producing countries including Australia
-- Rising demand from fast-growing economies such as China and India
-- High oil prices that have pushed up production costs
-- Dwindling stocks
-- Rising investment inflows in food commodity futures markets and hedge fund activity
-- The big push in biofuels programs that has diverted land and crops from food production.
-- Export restrictions imposed by countries including India and China
on rice, and by Argentina, Kazakhstan and Russia on wheat, which have
cut international supplies
-- Actions by large rice importers, such as the Philippines, in
floating large tenders to obtain needed rice imports, which have
boosted prices.
Note that except for China/India, the above factors are relatively recent - within the past few years.
And many of these factors are likely to continue. E.g., the
declining dollar, the defensive policies in both exporting and
importing countries, the bad weather (due to global climate change),
etc. etc.
And there are long-term supply/demand factors also putting a bid under the price.
For
anyone wanting more detail, Google on the USDA's report called
"Global Agricultural Supply and Demand: Factors Contributing to the
Recent Increase in Food Commodity Prices". That should get you
the PDF link.
