Sunday, May 22, 2011

Wheat prices sore 17% in past week alone as food inflation batters world

Let them eat bread.

That refrain, from the authoritarian regime of President Hosni Mubarak, kept impoverished Egyptians from violent rebellion for decades.

When food riots broke out in 2008, he contained them by promising to keep up the subsidies that were the barrier between malnutrition and starvation for one-third of the country’s 80 million people.

The protests that brought down his regime were driven by hunger for democracy rather than bread. But as Egypt and other Arab countries remain volatile, there are fears that spiking grain prices could propel new discontent.

In the past week, wheat prices soared by 17 per cent, a worrying sign for those countries where it is a staple of the diet.

The Arab world buys about one-third of all the world’s traded wheat, says the World Bank, and that’s due to rise by 40 per cent over the next decade. (read more)