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The Coming Food Shortage

January 8, 2010
Arthur Sim
1/8/2010

Investors Add Spice to Rising Food Prices

Global food prices are rising again with the United Nations Food and Agriculture Organisation (FAO) food price index hitting 168 points in November, the fourth consecutive month of increase and the highest since September 2008.

While this is still about 21 per cent lower than the most recent peak in June 2008 when the index hit 213.5 points, FAO does note that the index has never exceeded 120 points prior to the price spike between 2007/2008.

Several reasons have been highlighted for the rising prices. However, FAO has possibly for the first time highlighted the ‘growing appetite by speculators and index funds for a wider commodity portfolio investments on the back of enormous global excess liquidity’, as exacerbating the situation.

The story continues …..

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