Bloomberg - Food Prices Will Rise (in 2009), Causing Export Bans, Riots: Chart of Day

[sharon sanders]

• <small>NOVEMBER 26, 2008</small>

<!-- ID: SB122766140111858667 --><!-- TYPE: World News --><!-- DISPLAY-NAME: World News --><!-- PUBLICATION: The Wall Street Journal Interactive Edition --><!-- DATE: 2008-11-26 00:01 --><!-- COPYRIGHT: Dow Jones & Company, Inc. --><!-- ORIGINAL-ID: --><!-- article start --> <!-- CODE=STATISTIC SYMBOL=FREE CODE=SUBJECT SYMBOL=OWON -->Food Prices Will Rise, Causing Export Bans, Riots: Chart of Day


By Mark Gilbert
Nov. 25 (Bloomberg) -- Food prices will rise next year, prompting a revival of protectionism from food-growing nations and risking a renewed bout of rioting, according to Jochen Hitzfeld, an analyst at UniCredit SpA in Munich.


?Agricultural commodities will outperform the broad commodity indices in 2009,? Hitzfeld wrote in a research note this week. ?If key crop-producing countries then impose export bans again and speculators drive up prices via physical stockpiling and futures contracts, new food unrest is even conceivable in the second half of 2009.?


The CHART OF THE DAY shows food prices for the past 10 years as measured by an index compiled by UBS AG and Bloomberg that tracks at least 13 foodstuffs, including wheat, soybeans, sugar, cocoa and coffee. The index has declined 35 percent since peaking in July.


?The prices of many agricultural commodities are now clearly below their production costs,? Hitzfeld wrote. ?We expect the coming year to bring a cutback in area under cultivation as well as a decline in the yield per hectare.?


http://www.bloomberg.com/apps/news?pid=20601109&sid=aC.nz4FiZpkg&refer=home#

 

[gsgs]

Re: Bloomberg - Food Prices Will Rise (in 2009), Causing Export Bans, Riots: Chart of Day

food prices will(did) rise almost every year. But how much ?
That's normal inflation, designed and implemented into the currency.
Future prices are down a lot since some months.
We keep hearing about deflation threats.
(noone ever talks about inflation chance or deflation chance,
both are threats)

a big factor in food prices are transport costs, but oil is down
$150 --> $50
most food-futures are also down again, to the level of 2007
but much higher than 2005 and the years before

> ?The prices of many agricultural commodities are now clearly below their production costs,?

so they must have been below their production costs for decades ?