So much for my observation a week ago that the new record high on the FAO Food Price Index hadn’t led to widespread unrest yet – almost immediately afterwards, Algeria erupted in rioting, as was widely reported at the time. But two other developments in the past week are worth noting too:
First, the major dust-up underway in Argentina between farmers’ organisations and the government, over the charged issue of export restrictions. The government wants to limit wheat exports to only 8 million tonnes of the country’s 14 million tonne total. Farmers are furious, as they want to export more. As the FT’s Beyond BRICs blog notes, “The breakdown in talks heralds the end of an uneasy peace that has existed between the two sides since a bitter conflict in 2008 over taxes levied on soya exports. That led to farmers blocking roads, food shortages in Argentina’s major cities, a drastic fall in exports and a subsequent price rise on world grain markets.”
Second, the US government just cut stock forecasts dramatically for key grain crops, pushing corn and soya to their highest level since the price spike – so much for my observation that so far, the new price spike wasn’t afflicting grains all that much. Here’s the money quote, again courtesy of the FT:
Dan Basse, president of AgResource, a Chicago-based forecaster, added: “There’s just no room for error any more. With any kind of weather problem in the upcoming growing season we will make new all-time highs in corn and soy, and to a lesser degree wheat futures.”
