FOOD PRICES….This has been all over the news lately, but here’s a particularly striking chart showing the stunning increase in food prices over the past year. It looks an awful lot like NASDAQ charts from 1999 and housing charts from 2006. World Bank president Bob Zoellick explains:
Zoellick says prices for basic staples will remain high for an extended period of time. “I think you have a perfect storm of things coming together,” he tells NPR’s Steve Inskeep in an interview. “You have high energy prices. You have the increase in demand from some of the developing countries….As the Indian commerce minister said to me, going from one meal a day to two meals a day for 300 million people increases demand a lot. You have some of those countries moving to a different diet. So more meats require more grains. You have the biofuels expansion, which is a big source of demand.”
Of course, the other thing this chart looks like is oil prices circa right now. Peak oil is driving up oil prices, and that in turn is driving the ethanol boom, which is reducing the supply of foodstocks available for people to actually eat. I think we can expect this to continue getting worse.