eco 2 assignment 1 11.18.14 - Cheaper Hanoi Pork Shows...

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Cheaper Hanoi Pork Shows Crops Ease World Food Cost By Elizabeth Campbell Jan 3, 2014 At an outdoor market in Hanoi , Vietnam’s capital, Trinh Thi Thanh pays 100,000 dong ($4.74) a kilogram for the pork her family eats more than any other meat. That’s down from 150,000 dong a few years ago, easing pressure on the cost of family meals that had been surging, she said. “In the past, price fevers happened much more often,” said Thanh, 63, a housewife and grandmother who buys food for a household of seven adults and two children. “Now, even when wages or gasoline prices go up, food costs in the market don’t advance, or rise very little.” Gains in food costs around the world have slowed as record harvests from India to the U.S. expanded supply and sent corn, soybeans, wheat, sugar and coffee into bear markets. The Standard & Poor’s GSCI Agriculture Index of eight crops tumbled 22 percent last year, the biggest annual drop since 1981. Morgan Stanley and Rabobank International cut their outlooks for farm goods in December, and costs are easing for buyers including Panera Bread Co. and General Mills Inc. The world’s food-import bill slid 3.2 percent in 2013 to $1.15 trillion, the United Nations estimates. Global costs are down 13 percent from an all-time high in February 2011, when floods and drought ruined crops and sparked protests in Africa and the Middle East , toppling leaders in Tunisia and Egypt. The International Monetary Fund said prices will drop 6 percent this year. In Vietnam, where a third of income is spent on meals, increases slowed to a 5.1 percent annual rate in December from as high as 34.1 percent in August 2011. Lower Prices “Food-price inflation could be a little bit lower at the consumer level due to what’s happening in terms of commodity prices,” said Chris Rupkey , chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York . “Supply has risen, and the laws of
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supply and demand tell you that eventually these crop prices and these food goods are going to mean lower prices for consumers.” Corn posted the biggest commodity loss last year, dropping 40 percent. Wheat tumbled 22 percent, coffee slid 23 percent, sugar was down 16 percent, and soybeans declined 8.3 percent. The MSCI All-Country World Index of equities rose 20 percent, while the Bloomberg Dollar Index , a gauge against 10 major trading partners, added 3.5 percent. The Bloomberg Treasury Bond Index lost 3.4 percent. Corn farmers in the U.S., the world’s biggest agricultural exporter, probably harvested a record 13.989 billion bushels in 2013, and global output gained 12 percent to an all-time high, the government said Dec. 10. The grain is used mostly as feed for cattle, hogs and chickens, and to make sweeteners, cooking oil and ethanol. Prices in Chicago have tumbled 50 percent from an all-time high of $8.49 a bushel in August 2012. Wheat futures slumped 1.4 percent to close at $5.97 a bushel on the Chicago Board of Trade today.
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