Archive for April 2008

You can’t eat economics

April 20, 2008

Two separate news stories: the first from the Guardian. Apparently, the food crisis is ‘just a bubble’ and not the end of the world. Give it two years, and prices will return to normal.

“I see so much focus on food, and it seems to be so trendy in the investment world,’ O’Neill told The Observer. ‘The underlying dilemma has been created by the wealth of the BRICs [Brazil, Russia, India, China] countries; but, for the past year or so, it’s also been a major theme for financial institutions. The markets seem to me to have a bubble-like quality.’

Some analysts believe the bubble will collapse as supply responds to rising demand. Robert Ward, of the Economist Intelligence Unit, said he expected prices to drop by 8.5 per cent next year and another 17.6 per cent in 2010. Sean Rickard, from the Cranfield School of Management, said: ‘High prices will bring forth quite a significant increase in land area used for cereals this year, and Australia will come rocketing back now that its drought is over.’ Rickard predicted a 40 per cent drop in wheat prices in 2009. ‘I think this time next year, people will be saying, “what crisis?”‘ he added.”

From The Guardian

In the meantime, Haiti starves.

In Haiti, where three-quarters of the population earns less than $2 a day and one in five children is chronically malnourished, the one business booming amid all the gloom is the selling of patties made of mud, oil and sugar, typically consumed only by the most destitute.

“It’s salty and it has butter and you don’t know you’re eating dirt,” said Olwich Louis Jeune, 24, who has taken to eating them more often in recent months. “It makes your stomach quiet down.”

From the New York Times. Don’t miss the accompanying slideshow.

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