Global food prices at ‘record high’
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Global food prices rose to a new high in December, according to the UN’s Food and Agricultural Organisation. Its food price index went above the previous record of 2008 that saw prices spark riots in several countries. We hear from reporters in Egypt, India, and Russia who tell us what that means for people on the ground.
Ursula Lindsay from Cairo, Egypt:
Many Egyptians remember the fights that broke out in their bread lines back in 2008. A young woman told me she had been hit and pushed out of bread lines by other customers. She also complained that the government ration of bread wasn’t enough to feed her six-person family.
Rationing subsidized bread was one tactic the authorities used to solve the 2008 crisis. They also set up public kiosks to sell bread in a more orderly fashion. President Hosni Mubarak even ordered the army to bake bread. The 2008 “bread crisis” passed, but the problem has never really gone away. Food inflation in Egypt continues to run at a staggering 17 percent. Poor Egyptians spend more than half their income on food.
If global food prices rise again, millions here could face food insecurity. But the government has taken some steps to address the problem. It has cracked down on a black market in subsidized wheat. And it is reorganizing the subsidy system, trying to make subsidies efficient and targeted at those Egyptians who need them the most.
Furthermore, many here believe that the government will make an extra effort in this presidential election year. President Mubarak, who has ruled for the last 29 years, will probably run for another term. But there is a chance he will designate a successor.
In this time of political uncertainty, the regime will probably do everything it can to avoid unrest. The question is whether that will be enough.
Elliot Hannon from New Delhi:
In India, the price of vegetables can make national news. And lately, that hasn’t been a good thing.
News report: “It’s one emergency meeting after another on the skyrocketing prices of onions across the country.”
In fact, last month the cost of onions – a staple of Indian cooking – nearly doubled from last year’s price. Even more modest increases have led to the ousting of governments in the past. To help ease the burden, the Indian government banned the export of onions and even began importing them from its long-time adversary, Pakistan.
Poor weather has hurt farming output and contributed to the rise in price for food. But there have also been complaints of hording and speculation by traders, as well as mismanagement of food production and distribution. The rise of other goods, like fuel, has also made buying the basics more expensive.
At a roadside cart brimming with vegetables, Lakshmi Das surveys the options for the night’s meal. She says the spiralling cost of food has changed the way she shops. “Previously I used to buy a kilo of vegetables all at one time. Now I’ve cut it down. You can’t stop eating so what I do instead of buying 4 or 5 vegetables at one time, I buy just a little at least twice a day so that I don’t waste any of them”.
And so, instead of spending 200 Rupees, she now spends only 50 each time she shops. That has also made business difficult for Kapuri Davi, who wakes up each morning at 6 am to buy vegetables to sell door-to-door on her cart. “Business has gone down for sure. Now I’m barely able to manage my expenses at home, but nothing beyond that because of the price rise”.
While paying more for onions and tomatoes doesn’t necessarily affect the wealthy…. those not feeling the pinch remain an almost microscopic minority. India is a country where hundreds of millions live below the poverty line andif prices continue to rise, the worry is that India’s most vulnerable, like Davi and some of her customers, soon won’t be able to manage at all.
Jessica Golloher from Moscow:
Over the summer, Russia experienced its worst heat wave and fires on record. Millions of crops were destroyed. The horrific drought forced Russian President Dmitry Medvedev to ban many grain exports, including wheat. As a result, the prices of many foodstuffs have soared past record levels set during the 2007-08 food crisis.
There is a song about buckwheat, one of Russia’s main staples, in which the artist laments that Pasha and Masha want buckwheat with rice, only there is none. Not for all the dollars or Euros in the world, no buckwheat!
That little ditty might sound bizarre to most people. Why would Russians take time out of their busy lives to sing about a grain? Easy answer: the stuff is like gold here; it’s a staple, generally eaten at every meal.
The good news is, that Russia’s beloved grain is now back on the shelves after a several month hiatus, at least in most stores. The bad news is, the price for a kilo has jumped by more than 180 percent. And, buckwheat isn’t alone.
Figures from Russia’s state statistics service show that a kilo of both cabbage and potatoes nearly doubled in price during 2010. Other staples such as bread, butter and milk grew upwards of nearly 23 percent last year.
Elena Skrynnik is Russia’s agriculture minister. Here she is addressing the price hikes, through a translator, on state-run television.
“The main reason for such a dramatic increase in prices is the drought. We see a massive jump in prices for potatoes and buckwheat. We’re taking all possible measures to control the situation and the recent price rises are just speculative growth. The financial backing we’ve given farmers has stabilized the market. But yes, it’s a difficult situation”.
The Russian government recently said that it would release grain reserves and possibly put a cap on prices. Sergei Moiseev is with the Finance Institute. Here he is addressing the issue on Russia’s English-language television channel.
“I don’t dismiss the possibility of a top limit for prices on crucial food items like bread, butter, milk. The effect of these measures is very limited. That’s why there will be no limit for the wide range of goods, due to the fact that 2 years ago when those goods disappeared from shelves, and when prices were unfrozen the prices rebounded”.
Despite all the hubbub about prices, Elena Nikolaevna says she’s not going to worry about it because, well, she’s lived through a lot more here in the former Soviet Union. She says, you know, everything’s going to be just fine. They even said so in the newspapers. Now this is nothing, everything will be fine”.
….as long as Russians can have their buckwheat and rice.
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