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Food has hit the headlines again in a reminder of the spiralling inflation and social unrest that swept through the developing world in 2008.

This year's price spike is different in a number of ways but the fragility of the world's food system highlighted by the latest bout of volatility is very much the same.

Wheat prices have risen by around 70pc since the beginning of the year, mainly on the back of a heatwave in Russia that prompted Premier Vladimir Putin to slap a ban on exports until after next year's harvest. Good yields for other key exporters, such as the US, mean this is no crisis yet – but further shocks or increased protectionism could see things deteriorate quickly.

Things are different this time for a few other reasons. The price spike this year has been largely confined to wheat, although other foods, such as coffee, cocoa and meat, are pushing higher. Barley and corn prices are under pressure as consumers switch out of wheat where they can. Demand for food is also lower than two years ago and there is less of a squeeze from the biofuels industry thanks to the lower oil price.

It would be wrong to be complacent about the outlook for food prices, however. The increasingly protectionist behaviour of countries such as Russia is a symptom of a more introspective world. Food riots in Mozambique are a stark reminder that when food makes up a significant slice of total household spending, rising prices are not just an irritant but have the potential to topple governments. In the US, food has an 8pc weighting in the inflation basket; the equivalent figure in India is 47pc.

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In the shorter term, the most interesting opportunities probably lie in fertilisers. During the 2007/08 crisis the cost of commodities such as urea and potash rose around 10-fold. Having seen its share price spike higher two years ago but then fall back to a much more attractive level, it is no surprise that Potash Corp has recently attracted the attention of BHP Billiton.

Lord Beria3 wrote:If governments hadn't panicked and gone all protectionist, than maybe the speculators would had had less excuse to ram up prices.

In an astonishing outburst, Mr Putin said: “We all know that African countries used to have a tradition of eating their own adversaries.

“We don’t have such a tradition or process or culture and I believe the comparison between Africa and Russia is not quite just.”

The neo-colonial rush for global farmland has gone exponential since the food scare of 2007-2008.

Lord Beria3 wrote:Maybe you are right, but I don't think Russia's decision was a wise one.

It was done on narrow minded grounds with no thought to the consequences for the rest of the world.

Putin has a history on this...

http://www.thesun.co.uk/sol/homepage/ne ... 108581.ece

In an astonishing outburst, Mr Putin said: “We all know that African countries used to have a tradition of eating their own adversaries.

“We don’t have such a tradition or process or culture and I believe the comparison between Africa and Russia is not quite just.”

Russia's grain harvest in 2010 may total just 60 million metric tons, or 38% less than last year, Prime Minister Vladimir Putin said at a government presidium meeting.

"According to the latest Agriculture Ministry forecasts, the harvest will be much more modest than we assumed at the beginning of the year. It could total 65 or even 60 million tons," Putin said, adding that Russia's domestic grain requirements for 2010 amounted to 78 million tons.

syberberg wrote:So tell me how it's possible to export any grain, regardless of country in question, when there isn't enough to fulfil domestic requirements of said country and how that can possibly be described as "protectionist" rather than "pragmatic"?

kenneal wrote: The only losers are the grain merchants and hopefully the greedy 'kin *ankers.

syberberg wrote:So tell me how it's possible to export any grain, regardless of country in question, when there isn't enough to fulfil domestic requirements of said country and how that can possibly be described as "protectionist" rather than "pragmatic"?

Lord Beria3 wrote:Maybe you are right, but I don't think Russia's decision was a wise one.

It was done on narrow minded grounds with no thought to the consequences for the rest of the world.

No global food crisis appears to be looming despite a Russian wheat shortfall that has helped lift prices to their highest level in two years, but volatile food commodities markets need better regulation, a U.N. agency said Tuesday.

As for Russia's export ban on wheat, Ghanem said, "as a general rule, export bans are to be avoided as they create market instability."

Ludwig wrote:Oh yeah, right, and you think if Britain would do any different if it was in the same situation?

You advocate hard-headed self-interest, except when someone else's hard-headed self-interest affects you. Typical Tory-voter hypocrisy.