A severe drought in the US and other parts of the world is continuing to cause economic and well as social problems in many import dependent countires. We are very lucky to be living in the “bread basket” of Panama here in Chiriqui where 80 percent of the vegetables are grown along with other meat, dairy and fruits that we can buy fresh daily right around at the corner market. Not so in many other countries around the world and this problem will continue to shape world politics.
A spike in corn and wheat prices in just the past three weeks is raising concerns with the United Nations Food and Agriculture Organization (FAO).
Corn went from $572.88 per metric ton, on 24 June, to $814.30 a ton at the close of yesterday on the U.S. stock market. That means an increase of 42%.
Wheat was trading at $702.63 a ton on June 24 and yesterday closed at $915.50. In this case the increase in the last month was 30%.
As for soybeans, the international price in the stock went from $1,453.75 a ton, June 24, to $1,696.62 a tonne at the close of yesterday. That’s a 16.7% increase.
FAO economist Shukri Ahmed said the increase in price was sharp and sudden. He said that until May, experts were hoping for a huge increase in worldwide corn production.
The FAO Global Information and Early Warning System issued a bulletin Friday saying that drought in the United States is helping push up prices, while hot, dry weather in the Black Sea region is affecting wheat.
Ahmed says the price increase will put pressure on national budgets in countries that depend on imports for their domestic food needs.
“Northern African countries, Middle Eastern countries, some countries even in Asia and Africa who actually depend for more than 30 to 70 percent of their consumption needs on imports,” said Ahmed.
Add the threat of rising food prices to the list of troubles in Syria.
“Near Eastern countries, whether it is Iraq or Syria or others, actually import from the international market. So, if these prices persist as they are, it will have implications on the countries that import much,” said Ahmed.
Ahmed said that price increases will strain national budgets in countries that depend on imported grain, forcing them to make difficult choices.