The FT reported today that wheat futures price has gone up to over $8 per bushel, a very high price.
The FT comment made the following points analysing this rise.
The wet weather and increasing demand have combined to create concerns over supply this winter.
A UN spokesman pointed out that the Bio fuels industry was a major factor in the increase in demand as it is a major factor in the "non food" use of grains.
The UN spokesman for agriculture pointed out that the bio fuel industry, and the tax benefits given by the Bush administration to bio fuels such as ethanol, meant that more acreage was is given over to fuel production and thus the prices of foods other than wheat would increase as a result.
The UN are concerned that the increase will bear the heaviest on the developing countries. In the west, we spend on average 20% of our household income on food. However, in the developing countries the percentage spend is 65%. This the increase in prices hits those least able to afford it.
FirstMistake's comments
It seems that all the "green" energy initiatives mankind can dream up fall into the hands of "money" people who seize upon short term profit rather than doing some good by solving the problem. Yet again in our desperate attempts to maintain our unhealthy energy intensive existence, we just create a problem for ourselves elsewhere.
Everyone seems to be avoiding the simple solutions.
Change our lifestyle and consume less. It is that simple.
But to do that we need to change our socio-economic system. I would rather have reasonably priced food for everyone rather than the latest Xbox or wide screen TV.
It is time mankind got it's priorities’ right.
