The Common Good

Food Price Crisis Worse Than 2008 Predicted

The advocacy group Stop Gambling on Hunger reports world food prices are predicted to rise sharply in the coming months, due partly to speculation:

See the chart at http://necsi.edu/research/social/foodprices/updatejuly2012/
Chart showing predicted skyrocketing food prices, from New England Complex Systems Institute.

"The New England Complex Systems Institute, [which has] developed a quantitative model able to very closely predicted the FAO’s food price index, released a new report predicting sharply higher food prices due in part to excessive speculation.

"Their model, originally released in September 2011 matched the FAO’s index from 2004 to 2011. Since then it has continued to closely follow the real world numbers.

"Unfortunately, the model now predicts, 'another speculative bubble starting by the end of 2012 and causing food prices to rise even higher than recent peaks.'

"While the researchers acknowledge that the drought in the Midwest U.S. will cause prices to rise, their model shows that excessive speculative activity will have an even larger effect. Though some key financial reforms passed in 2010 may finally begin to be implemented in early 2013, that may be too late to avoid the coming price bubble."

Read the rest of the article here.