Food Prices Rise 80% in Developing Countries

The World Food Program (WFP) said today in Australia that food prices have risen 80% in the last year in developing countries despite the fall in world prices caused by the global economic crisis.

Josette Sheeran, director of the agency, explained that climate change increased fuel costs and this was reflected as a reduction of wages, limiting the consumption capacity of people. "Although prices have fallen in global markets in developing countries food prices are 80% higher than a year ago,"

The director of the WFP said that Asian country a harvest of 1.1 million tonnes of rice is likely to be lost because of typhoons and pointed out that currently natural disasters are more frequent and destructive in past.

In the world there are 1.020 billion people hungry. "One in six people in the world wakes up not knowing if you can eat," Sheeran told a news conference.

Today, however, Ambrose Evans-Pritchard of the Telegraph in the U.K says that food prices will never be so cheap again (!). He blames biofuel refineries in the U.S. he says that the world's grain stocks have dropped from and China's inventories are at a 30-year low, Asian rice stocks are near danger level.

"Yet farm commodities have largely missed out on Bernanke's reflation rally in metals, oil, and everything else. Dylan Grice from Société Générale sees "bargain basement" prices".

"Wheat has crashed 70pc from early 2008. Corn has halved. The "Ags" have mostly drifted sideways over the last six months. This divergence within the commodity family is untenable, given the bio-ethanol linkage to oil.
For investors wishing to rotate out of overstretched rallies – Wall Street's Transport index and the Russell 2000 broke down last week – this is a rare chance to buy cheap into a story that will dominate the rest of our lives".

Food at record lows and record highs, amazing.