L03Sep090.306 - Lecture 3: Global Food Price Dynamics...

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Unformatted text preview: Lecture 3: Global Food Price Dynamics Current Issues FRE 306 Intro Recent years (2006, 2007) food prices have increased dramatically Increase has covered all crops and oilseeds, in Canada and even more substantially in world markets Cereals price increase most dramatic; oilseeds too. Not much action on sugar. Livestock prices also have not increased much yet; this is yet to come (WHY?) 2 Lec 3 Recent World Price Dynamics Lec 3 Recent World Price Dynamics 3 Nature of Problem Food price run-up is a world market story World Food Market price increases, 2007-2008 (March) Wheat +130% Rice + 74% Corn + 31% Soy, oils + 87% Diary + 75% Meats, Sugar no significant increases yet Within Canada, U.S. retail outlets, price increases substantially moderated Due to further processing and addition of normal retail markups. Does not necessarily indicate profiteering. What are causes? Many Most prominent and significant cause: bioenergy programs in US, EU, Canada and many (!) other countries Increased incomes in Asia (China, India) Increase in export restrictions by exporting countries; notable in rice Monetary policy, value of US $, speculation 4 Lec 3 Recent World Price Dynamics Lec 3 Recent World Price Dynamics 5 Major Causes I Bioenergy programs Many such programs around the world Reducing supplies of land and other farm resources going to producing food for food Reliable sources estimate this accounts for 35-40% of last years food price increase Steady increase in demand for more and better quality foods throughout Asia, notably in China and India, due to rapid economic growth Steady process over last 5+ years, not one-yr issue Has added much pressure to food prices, pushing them up, but has not caused spike Lec 3 Recent World Price Dynamics 6 Major Causes II Reduced supplies on world markets due to export restrictions...
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This note was uploaded on 03/09/2010 for the course LFS FRE 306 taught by Professor Barichello during the Winter '09 term at The University of British Columbia.

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L03Sep090.306 - Lecture 3: Global Food Price Dynamics...

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