FOOD PRICES GONNA SOAR SOME MORE

15 04 2008
Agflation: more than just hunger pangs
By Paul Murphy on Sunday, April 6 , 2008

Here’s what will be a new word to some people: “agflation”. Yes, it’s a bit clumsy and jargony – a conflation of agriculture and inflation, and a rough variation on “stagflation”, the period of rising prices and falling gross domestic product that Britain in particular experienced in the 1970s. But it is a word we should all get used to because it will be uttered with increasing frequency over the coming weeks and months.

Agflation, of course, is the label applied to the shocking increases in the prices of basic food stuffs that have come in bursts over the past two years or so. In the West we saw it first in orange juice and then milk. There was a global ripple when the price of wheat suddenly rocketed, followed by maize and vegetable oil. And then in China, when the price of meat and chicken jumped, the realisation began to dawn that this phenomena really would have far reaching consequences.

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meanwhile, in China, the stage is being set for another shock to the food system:

BEIJING – A drought in China’s northeast Liaoning province has left nearly 700,000 people without drinking water after rainfall in the first three months of 2008 tumbled to one-fifth levels last year, the Xinhua agency said on Sunday.


The area is a top grain producer, and maize and rice farming is due to begin next week, but from January to the end of March it had got less than 2 centimetres (less than an inch) of rain.

Some 66 reservoirs have dried up, but the area has raised cash to build 1,700 new wells and expand and upgrade water conservation systems to try and ensure spring planting can go ahead, Xinhua said, citing local sources.

China’s weather administration said in early April that drought parching other parts of northern China was the worst in several decades and would continue this month.

Drought and floods are perennial problems in China, which has per capita water resources that are well below the global average. Its meteorologists have said global climate change is exacerbating extreme weather, including droughts.

About 30 million Chinese in the countryside and more than 20 million in urban areas face drinking water shortages every year despite huge government investment to address the problem.

Across China, by March 26, 19.4 million hectares (48 million acres) of arable land had been hit by the drought, including 3.3 million hectares (8.15 million acres) of cropland.

(Reporting by Emma Graham-Harrison; Editing by Bill Tarrant)

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