Economics: One Shock Away from a Serious Food Crisis

World food prices climbed to record highs this year after drought and flooding reduced harvests in major producers such as Australia and Russia. Although prices have come down somewhat, analysts noted a decline in key reserves and other evidence that markets for basic food commodities may now be persistently tight.

Now, with key reserves of many commodities at or near record lows, World Bank President Robert Zoellick has said the world is one shock away — a major crop shortfall in a large nation, a run of bad weather — from a serious food crisis. The potential fallout is clear: Rising food prices were partly behind recent unrest in the Middle East, and the bank estimates that food inflation has pushed tens of millions of people into poverty over the past year.

For more, see China Food Choices Reshaping World Markets by Howard Schneider, May 22, 2011 at The Washington Post.