Global Food Panic - When Drought strikes we all pay

9 Aug 2012 CNN

UN - Global food prices are on the rise. Abdolrez Abbassian is Senior Economist, UN Food and Agriculture Organization.

America's Drought isn't just America's problem. After 3 months of declines the wholesale cost of food rose thanks to the cost of grains. Damage to corn and maize crops. Corn prices are up 23%. The worst drought in 50 years. Cereal prices up 17%. In Russia drought is causing concern of a repeat of export controls. And Sugar! Up 12% because of Brazil's floods and Australia's drought. Grains, cereals, wheat.....this man says it is not a food crisis but global panic could bring one about.

"You get high prices and you get rationing. It is not a simple thing that we are making up. The prices for July is not a number that comes out of our books, it is a market price. Prices went up by 6 per cent. There are fundamental reasons for it. It is a concern for poorer countries that rely on the world market for their food"

[Laws of economics 101 - prices are going to go up!]

"Hopefully we won't go further but you're absolutely right. We can't change the weather. But we can make sure we don't make the same mistakes in 2007-08 when some countries put export controls. This is not a panic situation, supplies are out there".

[Realistically, as with Russia, when it comes to protecting your own market rather than worrying about next door it's a beggar-thy-neighbour policy you know it!]

"The US model is superior. They don't do that. Other countries are worried about domestic inflation".