Saturday, April 12, 2008

IMF warns food prices might cause starvation

The IMF warned that food price inflation would cause starvation if trend continues From the article:

"Thousands, hundreds of thousands of people will be starving. Children will be suffering from
malnutrition, with consequences for all their lives," he told reporters.
He said the problem could lead to trade imbalances that may eventually affect developed nations, "so it is not only a humanitarian question".

With the falling dollar, and with the increasing usage of corn going to the production of (inefficient) Ethanol, I do not see this problem going away anytime soon. It will be extremely sad if we do face global starvation. Recent riots in Haiti and the Philippines demonstrates how serious this problem is becoming. How can we solve this problem? Relinquish our Ethanol plans which will free up 30% of the corn produced in the USA for food (an not expensive alternative fuel)
As traders and investors, it makes very much sense to place our long bets with the soft commodities.

1 comment:

Kevin Lam (Impacta LLC) said...

Nice post Ken, you just gave me an idea:

http://communityinvesting.blogspot.com/2008/04/increasing-food-costs-next-macro-play.html