Russia’s recent announcement that it is extending its ban on grain exports until the end of next year once again sent wheat futures prices soaring. This after last month’s wildfires in the drought-ridden region boosted wheat futures to a two-year high.
But the good news is that officials in China and Australia are reportedly expecting good crop yields after worries that floods in the two countries, as well as a locust plague in Australia, would adversely affect the harvest. Although, as everyone knows, Mother Nature has a mind of her own.
So, it is best to expect a rough ride for the next several months as the wheat futures market will likely remain volatile, and bakers may again experience fluctuating flour prices similar to those in 2008.
Concerns also are growing that the world will see a repeat of the food shortages of 2007-2008, when rising inflation and high commodities prices made food in many parts of the world unaffordable. And riots and rationing occurred in many Third World countries. At the time, the United Nations World Food Programme attributed the crisis to a “perfect storm” of conditions–rise in demand for animal feed from India and China, whose populations were becoming increasingly prosperous; climate change; and the use of more land and agriculture produce for biofuels.
Not much has changed in the past two years. China and India, the two most populous countries in the world, are continuing to grow and prosper. The climate is still unpredictable, with droughts in Russia and floods in China. And use of biofuels, such as ethanol made from corn, is still increasing.
Food shortages often are as much a result of governmental or political machinations as they are of weather or soil conditions, but maybe it is time to look at another of the “perfect storm” conditions that we also have control of–biofuels.
I’m all for lessening our dependence on oil and other nonrenewable fuel resources, but is using grains as a source for fuel instead of food the best way to use this resource? (I can hear all the farmers screaming in my native state of Iowa.) Yes, grains are completely renewable, but with the world’s population growing–meaning more people to feed, the land available for farming decreasing due to urban sprawl and the increasing movement toward organically grown crops, which often result in smaller yields, grains may not be able to fill the dual roles of food and fuel for much longer.
We may reach the tipping point of deciding whether grains are food or fuel sooner than we’d like.