Archive for the ‘Mexico’ Category

From rice in Peru to miso in Japan, food prices are rising

April 3, 2008

  

MEXICO CITY — If you’re seeing your grocery bill go up, you’re not alone.

From subsistence farmers eating rice in Ecuador to gourmets feasting on escargot in France, consumers worldwide face rising food prices in what analysts call a perfect storm of conditions. Freak weather is a factor. But so are dramatic changes in the global economy, including higher oil prices, lower food reserves and growing consumer demand in China and India.

Planting crops for biofuels instead of food has caused a price spike, and foreign governments are moving to protect rice supplies. (Yusuf Ahmad/Reuters)

The world’s poorest nations still harbor the greatest hunger risk. Clashes over bread in Egypt killed at least two people last week, and similar food riots broke out in Burkina Faso and Cameroon this month.

But food protests now crop up even in Italy. And while the price of spaghetti has doubled in Haiti, the cost of miso is packing a hit in Japan.

“It’s not likely that prices will go back to as low as we’re used to,” said Abdolreza Abbassian, economist and secretary of the Intergovernmental Group for Grains for the U.N. Food and Agriculture Organization. “Currently if you’re in Haiti, unless the government is subsidizing consumers, consumers have no choice but to cut consumption. It’s a very brutal scenario, but that’s what it is.”

No one knows that better than Eugene Thermilon, 30, a Haitian day laborer who can no longer afford pasta to feed his wife and four children since the price nearly doubled to $0.57 a bag. Their only meal on a recent day was two cans of corn grits.

  

“Their stomachs were not even full,” Thermilon said, walking toward his pink concrete house on the precipice of a garbage-filled ravine. By noon the next day, he still had nothing to feed them for dinner.

Their hunger has had a ripple effect. Haitian food vendor Fabiola Duran Estime, 31, has lost so many customers like Thermilon that she had to pull her daughter, Fyva, out of kindergarten because she can’t afford the $20 monthly tuition.

Fyva was just beginning to read.

In the long term, prices are expected to stabilize. Farmers will grow more grain for both fuel and food and eventually bring prices down. Already this is happening with wheat, with more crops to be planted in the U.S., Canada and Europe in the coming year.

However, consumers still face at least 10 years of more expensive food, according to preliminary FAO projections.

Among the driving forces are petroleum prices, which increase the cost of everything from fertilizers to transport to food processing. Rising demand for meat and dairy in rapidly developing countries such as China and India is sending up the cost of grain, used for cattle feed, as is the demand for raw materials to make biofuels.

What’s rare is that the spikes are hitting all major foods in most countries at once. Food prices rose 4 percent in the U.S. last year, the highest rise since 1990, and are expected to climb as much again this year, according to the U.S. Department of Agriculture.

As of December, 37 countries faced food crises, and 20 had imposed some sort of food-price controls.

For many, it’s a disaster. The U.N.’s World Food Program says it’s facing a $500 million shortfall in funding this year to feed 89 million needy people. On Monday, it appealed to donor countries to step up contributions, saying its efforts otherwise have to be scaled back.

In Egypt, where bread is up 35 percent and cooking oil 26 percent, the government recently proposed ending food subsidies and replacing them with cash payouts to the needy. But the plan was put on hold after it sparked public uproar.

“A revolution of the hungry is in the offing,” said Mohammed el-Askalani of Citizens Against the High Cost of Living, a protest group established to lobby against ending the subsidies.

In China, the price hikes are both a burden and a boon.

Per capita meat consumption has increased 150 percent since 1980, so Zhou Jian decided six months ago to switch from selling auto parts to pork. The price of pork has jumped 58 percent in the past year, yet every morning housewives and domestics still crowd his Shanghai shop, and more customers order choice cuts.

The 26-year-old now earns $4,200 a month, two to three times what he made selling car parts. And it’s not just pork. Beef is becoming a weekly indulgence.

“The Chinese middle class is starting to change the traditional thought process of beef as a luxury,” said Kevin Timberlake, who manages the U.S.-based Western Cattle Company feedlot in China’s Inner Mongolia.

At the same time, increased cost of food staples in China threatens to wreak havoc. Beijing has been selling grain from its reserves to hold down prices, said Jing Ulrich, chairwoman of China equities for JP Morgan.

“But this is not really solving the root cause of the problem,” Ulrich said. “The cause of the problem is a supply-demand imbalance. Demand is very strong. Supply is constrained. It is as simple as that.”

Chinese Premier Wen Jiabao says fighting inflation from shortages of key foods is a top economic priority. Inflation reached 7.1 percent in January, the highest in 11 years, led by an 18.2 percent jump in food prices.

Meanwhile, record oil prices have boosted the cost of fertilizer and freight for bulk commodities — up 80 percent in 2007 over 2006. The oil spike has also turned up the pressure for countries to switch to biofuels, which the FAO says will drive up the cost of corn, sugar and soybeans “for many more years to come.”

In Japan, the ethanol boom is hitting the country in mayonnaise and miso, two important culinary ingredients, as biofuels production pushes up the price of cooking oil and soybeans.

A two-pound bottle of mayonnaise his risen about 10 percent in two months to as much as 330 yen (nearly $3), said Daishi Inoue, a cook at a Chinese restaurant.

“It’s not hurting us much now,” he said. “But if prices keep going up, we have no choice but to raise our prices.”

Miso Bank, a restaurant in Tokyo’s glitzy Ginza district, specializes in food cooked with miso, or soybean paste.

“We expect prices to go up in April all at once,” said Miso Bank manager Koichi Oritani. “The hikes would affect our menu. So we plan to order miso in bulk and make changes to the menu.”

Italians are feeling the pinch in pasta, with consumer groups staging a one-day strike in September against a food deeply intertwined with national identity. Italians eat an estimated 60 pounds of pasta per capita a year.

The protest was symbolic because Italians typically stock up on pasta, buying multiple packages at a time. But in the next two months pasta consumption dropped 5 percent, said farm lobbyist Rolando Manfredini.

“The situation has gotten even worse,” he said.

In decades past, farm subsidies and support programs allowed major grain exporting countries to hold large surpluses, which could be tapped during food shortages to keep prices down. But new trade policies have made agricultural production much more responsive to market demands — putting global food reserves at their lowest in a quarter century.

Without reserves, bad weather and poor harvests have a bigger impact on prices.

“The market is extremely nervous. With the slightest news about bad weather, the market reacts,” said economist Abbassian.

That means that a drought in Australia and flooding in Argentina, two of the world’s largest suppliers of industrial milk and butter, sent the price of butter in France soaring 37 percent from 2006 to 2007.

Forty percent of escargot, the snail dish, is butter.

“You can do the calculation yourself,” said Romain Chapron, president of Croque Bourgogne, which supplies escargot. “It had a considerable effect. It forced people in our profession to tighten their belts to the maximum.”

The same climate crises sparked a 21 percent rise in the cost of milk, which with butter makes another famous French food item — the croissant. Panavi, a pastry and bread supplier, has raised retail prices of croissants and pain au chocolat by 6 to 15 percent.

Already, there’s a lot of suspicion among consumers.

“They don’t understand why prices have gone up like this,” said Nicole Watelet, general secretary at the Federation of French Bakeries and Pastry Enterprises. “They think that someone is profiting from this. But it’s not us. We’re paying.”

Food costs worldwide spiked 23 percent from 2006 to 2007, according to the FAO. Grains went up 42 percent, oils 50 percent and dairy 80 percent.

Economists say that for the short term, government bailouts will have to be part of the answer to keep unrest at a minimum. In recent weeks, rising food prices sparked riots in the West African nations of Burkina Faso, where mobs torched buildings, and Cameroon, where at least four people died.

But attempts to control prices in one country often have dire effects elsewhere. China’s restrictions on wheat flour exports resulted in a price spike in Indonesia this year, according to the FAO. Ukraine and Russia imposed export restrictions on wheat, causing tight supplies and higher prices for importing countries. Partly because of the cost of imported wheat, Peru’s military has begun eating bread made from potato flour, a native crop.

“We need a response on a large scale, either the regional or international level,” said Brian Halweil of the environmental research organization Worldwatch Institute. “All countries are tied enough to the world food markets that this is a global crisis.”

Poorer countries can speed up the adjustment by investing in agriculture, experts say. If they do, farmers can turn high prices into an engine for growth.

But in countries like Burkina Faso, the crisis is immediate.

Days after the riots, Pascaline Ouédraogo wandered the market in the capital, Ouagadougou, looking to buy meat and vegetables. She said a good meal cost 1,000 francs (about $2.35) not long ago. Now she needs twice that.

“The more prices go up, the less there is to meet their needs,” she said of her three children, all in secondary school. “You wonder if it’s the government or the businesses that are behind the price hikes.”

IrGene Belem, a 25-year-old with twins, struggles to buy milk, which has gone up 57 percent in recent weeks.

“We knew we were poor before,” she said, “but now it’s worse than poverty.”

Katherine Corcoran is based in Mexico City. AP correspondents worldwide contributed to this report.

Perils in The Price Of Each Grain of Rice

April 3, 2008

By David Ignatius
The Washington Post
Thursday, April 3, 2008; Page A17

You may have missed the front-page article in the New York Times last Saturday, with the one-column headline written in clipped newspaperese: “High Rice Cost Creating Fears of Asia Unrest.” But this little story could be an early warning of another big economic problem that’s sneaking up on us.

The new danger is global inflation — most worryingly in food prices, but also in prices for commodities, raw materials and products that require petroleum energy, which includes almost everything. Prices for these goods have been skyrocketing in international markets — at the same time the Federal Reserve and other central banks have been hosing the world with new money in their efforts to avoid a financial crisis.

That’s an explosive mixture. It risks a kind of inflation that would trigger panic buying, hoarding and fears of mass political protest. Actually, this is already happening in Asia, according to the Times.

The price of rice in global markets has nearly doubled in the last three months, reports the Times’s Keith Bradsher.
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Fearing shortages, some major rice producers — including Vietnam, India, Egypt and Cambodia — have sharply limited their rice exports so they can be sure they can feed their own people.

Bradsher summarizes the evidence that food shortages and inflation are fueling political unrest: “Since January, thousands of troops have been deployed in Pakistan to guard trucks carrying wheat and flour. Protests have erupted in Indonesia over soybean shortage, and China has put price controls on cooking oil, grain, meat, milk and eggs. Food riots have erupted in recent months in Guinea, Mauritania, Mexico, Morocco, Senegal, Uzbekistan and Yemen.”

World Bank President Robert Zoellick rang the alarm bell in a speech yesterday. He noted that since 2005, the prices of staples have risen 80 percent. The real price of rice rose to a 19-year high last month, he said, while the real price of wheat hit a 28-year high.

Zoellick warned that this inflation is having political repercussions: “The World Bank Group estimates that 33 countries around the world face potential political and social unrest because of the acute hike in food and energy prices.” To cope with the topsy-turvy economy, Zoellick made an innovative proposal that countries running a surplus, such as Saudi Arabia and China, devote 1 percent of their “sovereign wealth” funds to investment in Africa‘s poor countries. That could yield up to $30 billion in development spending.

Now, cut to the Federal Reserve. At a time when global inflation is raging, you might expect that the central bank’s first priority would be to dampen inflationary expectations in the United States. But because of its worries about a financial meltdown, the Fed has been doing the opposite — drastically cutting interest rates in an effort to unclog the financial markets. The cheap money didn’t stop the Wall Street bank run — it was the Fed’s bold plan to absorb subprime debt that did that — but it may well add fuel to the inflation fire.

Related:
Lowly Rice Grain Impacts Global Economy

Vietnam and India move to limit rice exports

Inflation and Food Shortages?

Read the rest:
http://www.washingtonpost.com/wp-dyn/content/article/2008/04/02/AR2008040202997.html?hpid=opinionsbox1

Saluting and Honoring Colleagues

July 25, 2007

By John E. Carey

Every now and again it is proper and appropriate and just gosh honest enjoyable to, out of the blue and without warning, offer thanks, congratulations and admiration to the members of the family or extended family.

Today I thought it a good idea to salute some of those special members of the extended family that have made life worth living, enjoyable and educational.

My interest and involvement in Pakistan would be unfulfilled were it not for Muhammad Khurshid who operates in our behalf in a most rugged and dangerous part of the world: Khar, Bajaur Agency, Tribal Areas, Pakistan. In our workshops and offices his name is always uttered with dignity and utmost respect. He provides timely, insightful information from a place of vital interest to nations and terror groups alike. When Muhammad and I lose contact, even for a few days on either end; there is extreme anxiety and sleeplessness. I am proud to call Muhammad my brother and thank him for his dedication and service.

Mike Benge and I have had an email and internet contact for about four years. I first “met” Mike because of his insightful work writing for the Washington Times on Vietnam. We share a passion for freedom and human rights, a love of the peoples of Vietnam and a desire to contribute in the world community. Mike would be my half brother as I can never fully honor or equal his time held captive himself by communists or his stellar contributions to the History Channel. We cannot regain the past; so we both now man the gates of justice and reality and attempt to keep honest and aware those that might overlook different problems in far away lands.

Debbie Hamilton runs a web site called “Right Truth” and we invite all readers to pay a call upon her there. Her daily contributions are, as she has named her site, “Right” on the button. Debbie is also an accomplished author and everything she writes is “must read.”
http://righttruth.typepad.com/

Miguel Sanchez keeps his eyes and ears open for us in Mexico and Central America. He says he has a plan to stray as far as Honduras to meet Cha Chuc, who walks the dusty paths and hills there. Hearing that we were interested in all things Harry Potter, last week Miguel mounted his motorcycle and, braving death in Mexico City traffic, headed to the Diocese of Mexico City to interview clergy there. He returned home with a wonderful scoop and our continued respect and admiration for his grit, determination and acumen under difficult circumstances.

I have known and admired Benjamin Allen for something like five years now and we each admit that we wish had been allowed to share the same office spaces longer.  Ben and I recently teamed to write about medical issues of importance that sometimes get overlooked for the Washington Times.  I prize Ben’s frequent guidance and comments by email and look forward to our next opportunity to make a contribution together.

Others in China and Southwest Asia have our daily eye until their projects are complete or they reach safer ground. We salute each and every one of you dedicated soldiers and journalists.

Finally, we are newly acquainted (a few month of just touching base) with Les Lothringer in ShangHai, China. Les is a veteran business consultant with over 30 years of commercial experience including Business Renovation, Management Consulting, Interim Management and Workshop based Training in diverse industries throughout the Asia Pacific Region.  Les brings together the best ideas and interests of Asia and the West (as we say here at Peace and Freedom, “Asia and the rest”). Today Les honored us with a learned essay that has enhanced the understanding of many readers. Please visit Les at his site and remember his team when those perplexing issues within his areas of expertise arise. http://www.strategywestasia.com/

This marks the end of today’s honors ceremony but it is with extreme pride that we call all in our family and extended family friends, professionals and allies.

China not sole food-safety offender

July 21, 2007

July 21, 2007

MEXICO CITY (AP) — Mexican cantaloupe irrigated with water from sewage-tainted rivers. Candy laced with lead. Chinese toothpaste is not the only concern for U.S. consumers wary of the health risks posed by imported goods.

Producers in other developing nations are notorious violators of basic food-safety standards, even as they woo consumers with a growing appetite for foods such as pickled mangoes from India and fruits and vegetables during winter from Mexico.

Read the rest:
http://www.washingtontimes.com/apps/pbcs.dll/article?AID=/20070721/BUSINESS/107210055/1001

Related:
Tricky Vietnamese Truth About Catfish