Food Prices

the effect of rising food prices

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  • Created on: 04-05-13 12:13
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The Effect of Rising Food Prices
How food prices changed:
Prices of foodstuffs peaked in early 2008.
Wheat prices 130% up, Soya 87%, and rice 74% in the 12 months to march.
Although food prices fell later in the year, they were still at statistically high levels.
o In August, for example, that although food prices had fallen by 6% on average that
month, prices were still 13% higher than they were in August 2007 and 60%
higher than in August 2006.
Factors that caused the changes:
Population growth.
o More mouths to feed puts pressure on a range of resources, including land, water
and oil, as well as food supply.
Changing diets.
o China and India are growing in wealth, meaning they want more food, as more of
their population is middle class.
Global warming.
o This means more people want to use food crops for bio-fuels.
Higher transport costs.
o Due to surging oil prices.
o This pushed up the cost of transporting food and fertilisers.
Poor harvests.
What did higher food prices cause?:
Poor people in developing countries face higher prices for imported food.
The World Bank also warned that the high price of food could lead to developing countries
missing international poverty targets.
Food riots in Indonesia, Egypt, India, & other countries.
Farmers in nations such as the US, Brazil, Argentina, Canada, and Australia, have gained
record prices from their harvests.
What was done about it?:
Food prices were subsidised.
An international summit on the food crisis was held in Rome in June.
o Here is was decided that global food production must be doubled by 2030.
o It also agreed to support poor farmers, and to seen more aid.
o An extra $1.2bn was pledged in food aid.
What happened afterwards?:
Bumper crops appeared ­ great harvest.
Recession in countries took pressure off demand for food products.
Oil prices dropped ­ meaning cheaper transportation.
However...:
Data suggested prices were still rising even through the recession.
People still found it hard to buy food as although prices were cheaper they also had less
money due to losing their jobs.
The population growth & growth of the middle classes may keep prices permanently high.

Comments

Abbie

Great document.

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