Food market should wait for next shocks, experts of The Daily Telegraph think. Russia lost about half of the harvest of potato, grain crisis will last next year and will make the government to purchase grain on foreign market. From June of the current year wheat is up by 70% as the drought badly damaged Caspian-Black Sea region which gives a quarter of the world deliveries of wheat.
They in Food and Agricultural Organization of the United Nations hoped that everything would be settled to September but it's not so: more and more food products go up. Organization is afraid of repetition of 2008 and jump in prices which ended in food revolts in the countries of "the third world". Then the price for wheat reached 13 dollars - now world prices are less than these pick figures by 22%.
Russian harvest of wheat will make not more than 60 million tons this year, while domestic consumption - 75 million tons. The country has 9.5 million tons of grain in intervention fond. Russia is short of 17 million tons and will be compelled to import grain next year.
Other reason for worries - corn. Prices for this cereal from June is up by 40%. Among the main reasons - poor harvest in the USA. At the same time China declared that it purchased in August record 432 thousand tons of this grain. At that world stocks of corn are at the minimum for last 37 years levels, it also pushes prices up. If there will be one more disastrous year in Russia or Ukraine, it will shock world food market.
Many economists are sure that difference in prices for foodstuff and recordingly high prices for gold signals about threat of inflation in general; super-loyal credit-monetary policy of the USA and Europe create superfluous liquidity in the world.
Russia is on the third place on the level of inflation in Europe. For January-August it made 5,4% and to September, 20th it reached 6%, at that initially Russian government planned not to overcome the limit of 6-7% in 2010. The quickest rise in prices is fixed by Federal State Statistics Service on bread and bakery products (3,2%), on diary products, cheese and eggs - 2,3%. Fruits rose in prices by 2,1%. Only Malta (+6.4%) and Romania (+5.6%) managed to get ahead of Russia on the level of inflation in Europe.
AS a result, forecasted annual inflation in Russia could reach 8,5-9% "with high probability of double-figure rise in prices in the first half of the next year", according to data of the Carnegie Endowment. As its experts note, foodstuff composes quite big share in consumption charges of the Russians - about 38% in 2010, therefore all-world rise in prices on food "quickly and strongly will influence the Russian index of consumption prices". "For example, when in 2007 world prices on wheat were up by 2-3 times, food inflation in Russia reached 21%, while non-food - up to 7-8%", - is stated in the survey of the Endowment.
World central banks should make difficult choice between inflation and deflation scenario as a result of lack of food, The Daily Telegraph considers.
From editorial board: Surely, it's possible to talk with pride that at last the destiny of the world food market depends on the harvest in Ukraine and Russia. It's possible to say vise versa - excessive integration into the global markets multiplied risks of global catastrophes too.
Again if rise in prices for foodstuff in Europe just places a question of purchase of the third car for a family, for the family in Tolyatti it means - shift on three meals: on Monday, Wednesday and Friday.
At least, as we have just explained, rise in prices on buckwheat - it's not an excess but general tendency. As well as the third at a run retirement of economic advisors of Obama.
We are most of all worry that our citizens who without it don't get enough necessary products on the regular basis will shift on the lowest standard of nutrition that is they will shift on grains and spaghetti. Children's death rate, illness frequency and so on will grow - exclusively due to the poor nutrition. Let it go - this macroeconomics - poor people...
Anatoly Baranov, editor-in-chief of FORUM.msk