The impact of the US financial crisis has not just confined itself to
Wall Street but also affected the global food markets severely. Early
in 2009, the world encountered a disastrous fall in food production as a
result of the financial crisis and unfavorable weather conditions on a global
scale. Food prices have been rising steadily, and the rising demand in
emerging economies and widening demand-supply have all aggravated, raising
concerns about food security globally. A recent estimate by the UN
Standing Committee on Nutrition suggests that soaring food prices, combined with
the global economic meltdown, left more than 1 billion, or one in six people on
the planet, struggling to meet their basic food needs, leading to increased
instances of disease and death.
In the meantime, in an endeavor to maintain their economic growth,
China and other Asian economies were unleashing domestic consumption,
long controlled by inflation concerns and demand for raw materials, especially
food staples. Against this background, there is indisputable evidence that the
world will run out of food next year. If this happens, many nations will face a
record food inflation, which in turn will make panicking central banks dump their
foreign exchange reserves to meet the cost of food imports. These
developments will further cause the collapse of the
US dollar, derivative markets and the global financial system. Thus, the
drivers of the next financial crisis will be panic about food supplies and the
dollar's plunging value.
|
