Chart of the day: The food price spike is still with us
Remember back in 2008, when oil prices were flying up toward $140 per barrel, and food prices were skyrocketing? The news was full of stories of riots breaking out in Haiti and Bangladesh and Egypt. Then the housing bubble popped, oil prices fizzled and the food stories went away. All clear on the apocalypse front, right? Except, as this chart from FAO shows, the food price index has quietly been sneaking back past 2008 levels over the past year, and shows no signs of abating:
On Tuesday, the World Bank put out a new report explaining recent trends. Relatively high oil prices have been a big contributor, affecting production costs and the price of fertilizer. Lower than expected sugarcane yields in Brazil didn’t help, either. And there’s even a domestic policy angle: U.S. biofuel mandates have led to a surge in demand for maize, which has, in turn, shrunk stocks to low levels, so that even small changes in yield (a drought here, a flood there) can have an outsized effect on food prices.
Might be a good time to reread Lester Brown’s piece in Foreign Policy on the new geopolitics of food: “Until recently, sudden price surges just didn’t matter as much, as they were quickly followed by a return to the relatively low food prices that helped shape the political stability of the late 20th century across much of the globe. But now both the causes and consequences are ominously different.”