World wheat prices increased about 70% in the second half of 2010. Overall, the UN Food and Agriculture Organisation’s world food price index was, by the end of 2010, as high as the peak it reached in 2008. The FAO expects it to go higher still in 2010.
Food prices rose very fast in 2007 and the first half of 2008; dropped again in the second half of 2008 as the financial crisis “deflated” economies; and have been rising since early 2009, with a lull in the first half of 2010 and a sharp increase since then.
Overall, food prices are about two-thirds higher now than they were at the start of 2007 or the start of 2009.
In Britain this is troublesome. In the world’s poorer countries, it is deadly, pushing hundreds of millions of people into under-nourishment.
Weather difficulties and crop failures are cited. However, 2010 had the biggest world rice harvest ever, and rice prices still rose about 24%.
Speculation plays a large part. As reserve stocks dwindle, speculators expect higher prices. They buy up stocks and hold on to them to win profits. That sends prices higher still.
According to the Financial Times, just “four trading houses [three American, one French] dominate global flows of agricultural commodities”. Cargill, the biggest of the four, trebled its profits in September-November 2010 compared to 2009.
Capitalism means millions of people going hungry because of big corporations’ drive for bigger profits.