Food Price Escalation

Food Price Escalation

food price escalation globalThere is a lot of noise in the media at the moment about food prices going up and the prospect of food driven rioting and unrest in many parts of the world.  Consequently it would seem to be a good time to examine the picture and look at the factors which drive the prices. The FAO food price index shows a very significant rise in the overall price of food since early 2007 and a peak around the summer of 2008 and a second even higher peak in early 2011.

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The factors that drive these prices are complex but eventually come down to the supply and demand equation. If the supply exceeds the demand prices come down – if the reverse is true then prices go up. In Russia 2010 the wheat harvest was devastated by numerous fires caused by drought and Russia banned any exports of wheat and began buying up world stock – the price went up. Currently, May 2011, there is growing unease about the effect of poor winter weather on US and Chinese food crops.

There is also pressure on food supplies because 100 million Tonnes of grain is being consumed by the BioFuel Industry to create fuel for automotive use because mineral oil prices are high. We live in a connected world and the effect of one shortage can often impact many other areas.

For example – if you look at the price of sunflower oil 2 years ago it was retailing for 58p/litre today it is closer to £1.30/litre – why because sunflowers are in high demand both by food manufacturing but also by the BioFuel industry.

Not all food prices have gone up in every area but the staple diets of many of the poorest people in the world have often been hugely affected.

Is Food Price Escalation Inevitable?

food price escalation globalIf you listen to the media you might believe that the speculators who trade food based commodities are to blame for the huge rise in prices. The truth is that the main factors are reduced supply because of weather, local effects like fire and floods and growing demand from China, India and the rest of the world. The commodity speculators are not the major driving force but they have amplified the problem to some degree.

Sugar is a good example – demand simply exceeds supply and the inevitable consequence is higher prices. Prices were dependant upon supply – good harvest=lower price. Failed harvest=Higher price.

Coffee makes an interesting case study. In the 1980s and 90s coffee prices fluctuated due to good and then poor harvests. Today, because of commodity trading, the price increase is due bets being placed on the longer term price of coffee.

Food Price Escalation and Oil prices

There is little doubt that the long-term price of mineral oil will continue to rise – it is inevitable. That too will continue to put an upward pressure on food prices and in the developed world is a very significant driving force in the long term – food price escalation is unavoidable and it hits the poorest first.

Food, Oil and the environment are inextricably linked and in some ways uncomfortable bed fellows. The UK inflation figures published 17 May show the CPI increased to 4.5% and most of the rise was put down to the increase in transport fuel prices. That then feeds into the RPI through food prices on the high street. The global picture is even starker and many African/Asian communities are noticing a rise in fuel and food costs. Floods in Australia not only pushed up prices by 30% in the following months but also began to exert upward pressure on food markets in Asia – food price escalation is a complex picture and one that refuses to go away.

Forbes are predicting a steady rise of 3% year on year – whoever suggests that food price escalation is a myth needs to re examine the facts.

We have to find solutions to the problems – the consequences of just letting things run out of control are simply too uncomfortable to bear. So we’d like to know what you are prepared to do/or are doing:

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Food price escalation is a threat to society an nations, we have to face the problem and do something about it?

Author: Steven Chasen

Here at Eco Hip we have a simple philosophyTo offer you the best natural products around, so that you can maintain a chemical-free home, body and spirit.For 15 years we have been striving to give people the opportunity to enjoy and benefit from this lifestyle, using our knowledge and experience to guide you through the process from start to finish. We believe that there is a complete synergy between what is best for you and what is best for the environment.Do you ever stop and think about what goes into the products that we use on a daily basis?Did you know that everyday products such as toiletries and cosmetics are filled with harmful petro-chemicals, parabens, GMOs (Genetically Modified Organisms), DEAs, MEAs, TEAs, artificial colours, fragrances and fillers. The list goes on…Why aren’t there stricter regulations concerning these products?Are the waste products of industry being dumped and sold in our personal care and cleaning products?Who is stopping this and telling it how it is?We feel that we have a responsibility to both our customers and to the world around us to ask ourselves these questions every day. That is why we only sell the most responsible and sustainable products.Responsibility to ourselves – All our products are free of toxic chemicals wherever possible and endorsed by Ecocert and the Soil Association.Responsibility to others – We promote Fairtrade produce to stop exploitation and benefit those communities.Responsibility to local communities – We use local suppliers and products wherever possible in order to support the local economy and reduce our carbon footprintResponsibility to the environment – All our products use minimal packaging and recyclable materials. Responsibility to the future – We use sustainable materials and ingredients wherever possible.Responsibility to animals – We do not use any products that have animal ingredients or are tested on animals. Our products are certified as cruelty-free and are endorsed by BUAV and PETA.There doesn’t have to be a trade off between affordability and healthy living either. The choices we make now will impact our future, and we want to ensure that the investments you make now will save you money in the long-term.Sustainability doesn’t just have to connote the environment, but your own household too.In the age of information overload that we live in, we know that shopping online can sometimes be overwhelming, so we carefully source our products, selecting only the highest quality ingredients and most innovative designs, so that you don’t have to.Ecohip is more than just another online shopping website. The Ecohip mindset is all about challenging conventional thinking and finding a new way of looking at the world, believing that smalls steps can gradually add up to make a big difference.

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