Food has been in the news lately. Here are some useful information:

Why Food Prices Are Going Up?

Fallacy No. 1: The surge in demand from China and India. Hundreds of millions of people are joining the middle class each year, and that means they want to eat more and better food.

Fact: Rice has been the staple food of half the world for centuries, and it is hardly rich man’s fare. Moreover, according to an April 2008 analysis from the United Nations' Food and Agriculture Organization, food consumption of grains has gone up by only one percent since 2006. That hardly explains the fact that the price of rice has spiked by 75 percent in just two months. The price of Thai 100 per cent B grade white rice, considered the world’s benchmark, has tripled since early 2007; and it jumped 10 percent in just one week.

Fallacy No. 2: Growing demand for ethanol as a fuel additive.

Fact: Bio-fuels have drained off some of this grain, but biofuels did not suddenly happen, the rise in food prices would have been gradual and predictable to match.

REAL REASON:
Conventional economic theory says that prices are driven up when “demand” exceeds “supply.” But in this case “demand” does not mean the number of hands reaching out for food. It means the amount of money competing for existing supplies. The global food crisis has resulted from an increase, not in the number of mouths to be fed, but simply in the price.

It is the money supply that has gone up, most of it in the futures market, where fund managers seek to maximize their profits by using futures contracts. The “hot money” that has fled the collapsed real estate bubble is now moving into the commodities bubble, and that includes food.

That's not much consolation for the poor trying to stretch their dollars.

Yup, good thing is that rice is has no future...err futures market that is
This food futures market is killing the population!

Rachel,

I remembered reading that there is no futures market for rice. In that case, the rise in price of rice can't be explained by hedge funds. There has to be some other factor - hoarding by speculators?

Things are all coming together. Oil rise, commodities rise, precious metals rise. the financial markets wobbling. I have tried to explain this phenomenon from the standpoint of the International Financial Class (IFC) manipulating the world market to make money (see The Rat Race Part IV - The Pyramid). I am still trying to sort out these ideas and testing it real-time to see whether the theory works. Time will tell.

Interesting, but may I know the source of this findings? I'm only asking because your findings seems to contradict major global research on the causes of increasing food prices.

For example, in this BBC News article, it says the reason food prices are increasing worlwide is because:

1. World population is increasing, we have reach the point where there are simply too many mouths to feed
2. Rise of India and China economies. Rich people simply eat more than poor people.
3. Climate change and frequent floodings affecting crop yields
4. Biofuels - in the US, 30% of corn crop is being used for bio fuels, thus pushing up the price of corn flour on international commodity markets.

And this is the facts and figures on the global rise in food rices: http://news.bbc.co.uk/2/hi/7284196.stm

I'm interested to see if there are any other or the "real" causes of food price increase, and the supporting facts, of course. Because, you need to know the exact cause before you can find a cure.

Denver,

Thank you for the link. It is entirely possible that the BBC is absolutely correct. The article I referred to here:
http://www.webofdebt.com/articles/g...food-crisis.php
look at it from the perspective of hedge fund speculation. Hedge funds look for small discrepancies in the financial markets and use leverage to amplify the differentials that they can make by betting on one side of the market. They found that there was some shortage in certain areas of the food market. By cornering the market, they forced prices to rise way above what a normal shortage will justify.

The news which in many cases is just "noise" helps to "explain" why prices rise. On the surface the reasons seem sensible. What I am saying is, at this point in time, we cannot really "know" the true reason for the rise. It could be food shortage. It could be speculation. It could be both. We have to wait until it is all over before we can really tell the reason. By that time, some people would have made a killing.

I have tried to suggest here The Rat Race Part IV that the international news media could be part of a global conspiracy out to mislead and manipulate us. It could just be whistling in the wind. We never know. There is strong evidence to suggest this is the case where the US stock market, financial services and gold market is concerned. It is up to us to decide whether to accept it or not. Personally, using that concept has helped me to "see" things better.

I don't think there is any cure for the greed of man.

no wonder i had to pay rm 3.50 for a plate of half rice and 3 vegetable!!!!!

This is the only valid reason i too know for the price increases nothing else.

Time and again has proven that the moment that greed is the single most evident motivation for price inflation and it hurts most rakyat badly, especially if this country are net importers of many items. Again, nothing much the rakyat can do except to curb and control own desires and spending habits and life doesn't really become more meaningful. Sad!. Don't expect the BN gahmen to help much..they yak nonsense in Parliament just about too much.

I tapau mamak food, curry chicken(3 small pieces) and long beans. Doesn't look that pack but kena charge RM4.80 instead of the usual RM4.20.

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If not me, who? If not now, when?

Like I said "good thing is that rice is has no future...err futures market"
or else it will be even worse with the huge amounts of dirty money artificially pushing up the price of rice!

What are the contributing factors for this increase is (according to racheljansz opinion):-
China Olympic games.
Chinese are buying a lot of rice not just because bad harvest but they cannot afford not to have rice during this event.
Boh Bin la, no no where to hide face.

This is also a contributing factor to the price rise in Chinese Herbs, Dry/Preserve fruits/food & Tea.
Also includes other food stuff that has a long shelf-life, that China buys.- (Palm oil)
This domino effect is causing problems to the regular buyers - Asian and African who suddenly find interruptions in their supply.
What else to do but to offer higher price to ease these interruptions of the essential staple food.

Now that the price has increase we should get to see herd instinct and vultures at work.
and ah yes ... the greed of man?

This Bolehland was at one time self-sufficient in rice production.
I should know because my 1st Job was to sit at Lembaga Padi Negara office very early in the morning,
waiting for permit to transport the rice out of Kedah.
Today some of these padi field sits idle or worse houses/ complex sits on it!
The government does not see Padi Farmers as 'towering bumiputras'
Maybe UMNOputra just see the land$ only.
Maybe they are so fixate on getting the Malays off the hot sun and muddy padi fields that they forgot they have nobody left to produce the staple food?

At least AAB is trying to bring back the agri/agro sector to modern times with modern methods & thinking.
Oops did I just said that!
But it will only work if they do not choose the color of the cat.
Our neighboring up north, Thailand, at one time were not even able to produce the quality rice that some farmer in Kedah were.
Today these thais are a decade or two ahead of us!
Not only in terms of quality or quantity or yield/hectare but also in terms of export marketing!
Be it rice or fruits or fish or anything agriculture, at every International Food Shows their govt seems to provided lots support - facilities, incentives & manpower...err..."well trained female promoters holding agro/agri based degree" as per my ex-boss discription. (Do not know if it is pcyeoh's member , my apologies pcyeoh)

Today they are proud of this agriculture heritage, from Royalty right down to the man-in-the-street, which is earning big bucks internationally.
Some one mention in this forum, due to increase food prices best thing is go into food business?

Good points, Rachel. I remembered someone advised: "Change your lifestyle".

I won't call names this time. Must jaga my banana quota.

On a personal level, I am going to do some planting on an empty plot near my house - more for exercise than anything. If we all do our little bit, it can make a difference.

Anyone knows why the ingredients used for food is going UP like mad. ALL ingredients are going up like never before. Wet groceries, dry groceries, cooking ingredients, condensed milk, RICE, ....you name it....

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That's OK Chang, I am quiet aware of your biased moderation too... And I dont need to slip in any last few words

as mention

Psst. Your PM message box is full.

When has man ever been NOT greedy?
This is like prior to the increase man has not been greedy?

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That's OK Chang, I am quiet aware of your biased moderation too... And I dont need to slip in any last few words