You can't eat bubbles

10 September 2007 By Martin Hutchinson

The UN food agency s boss thinks high food prices will cause riots. Since food is important to poor people s budgets, he may be right. Western policies have caused the current commodity price boom. Change policies, and the world will remain well able to feed itself.

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Jacques Diouf, Director General of the Food and Agriculture Organization, warned September 6 that developing countries face serious social unrest because of higher food prices. He expected food prices to continue to increase because of strong demand from developing countries, a rising global population, more frequent floods and droughts caused by climate change and the biofuel industry's appetite for grains. He said that food represents 1020% of consumer spending in industrialised countries but up to 65% in developing countries.

December wheat futures rose September 5 to a record $8.86 per bushel on the Chicago Board of Trade, up 60% in 2007.

Mexico on August 15th extended its controlled price of Ps8.50 per kilogram ($0.35 per pound) for tortillas, originally imposed in February, until the end of 2007.

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