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Cost of food: Global roundup

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Full coverage: The cost of food

CHRIS MORRIS, DELHI, INDIA

Ordinary Indians are facing significantly increased hardship because of the rise in the cost of food. The rate of price increases seems to have slowed, but many basic foodstuffs like rice and lentils are far more expensive than they were a year ago.

India

And that means people on or below the borderline - hundreds of millions of people - are struggling to make ends meet.

In the most extreme cases, severe malnutrition is a life-threatening condition. There are about eight million children under the age of five in India who are in urgent need of therapeutic feeding and nutritional treatment.

But there are also tens of millions of children who suffer from chronic malnutrition which may not be immediately visible. They are deprived of many of the nutrients they need to lead healthy productive lives.

In India, the rise in the cost of food has not created a crisis, it has simply made a bad situation worse.

Rising inflation has received considerable attention in the Indian media, but the recent focus has been on the global financial turmoil, and its impact on Indian markets.

Chris Morris discovers why India's young people are the hardest hit by high food prices

That is of little immediate relevance, though, to the vast majority of people in this country. What matters is the price of vegetables, the price of flour, and whether there is any work to be had to buy the food they need.

Two thirds of India's population are forced to get by on less than two dollars (1.15; 1.47 euros) a day. And the little money they do make now buys less food than it used to. Something has to give.

CHRISTIAN FRASER, CAIRO, EGYPT
Inflation in Egypt is at a 16-year high with soaring food prices triggering violent protests in some areas of the country this year, prompting the government to raise public sector salaries by 30%.

But the pay rise was soon followed by increases in prices of fuel, which sent the cost of goods and services even higher.

A family in the bread queue in Cairo, Egypt
An Egyptian family can spend as much as 80% of its income on food
Egyptian economist Samir Radwan says that while the levels of salaries and subsidies may have risen, "the government's liberalizing of some other commodity prices means the poor are actually worse off than they were before May".

Many poorer families in Cairo - some of whom spend 80% of their household income on food - have been making savings by cutting their meals from three a day to just two.

Egypt is also the world's largest importer of wheat, which explains why the country has been hit so hard by these international price rises. Finance Minister Youssef Boutros-Ghali says a large part of the inflation in his country stems from the higher prices of imported goods. But he believes that, as the year progresses, things will start to look better.


Egypt is the world's largest importer of wheat, which explains why the country has been hit so hard by these international price rises

The wheat Egypt has, in the past, bought from Russia and Ukraine now looks much cheaper.

"Look at international commodity prices," he says. "Wheat used to be $480 a tonne, it has now fallen to around $200 a tonne. Corn is the same. Soybean the same. Edible oils the same. All of this is bound to translate here. We will see prices fall."

JULIA CAESAR, LONDON, UK

Despite the UK's wide variety of shops competing for custom, many here are feeling the pinch. But, after nine long months of price rises, food inflation seems to be slowing down.

According to the BBC's Food Price Index compiled by Verdict, which tracks the cost of a typical trolley of UK food items, meat and fish products rose by 22.9% from January to August.

graphic of cost of food

General store-cupboard items, such as tinned foods, registered a 15% increase and seven items in the survey leapt in price by more than 40%. A pack of four croissants, for example, was 47.4% more expensive and a 125g packet of ham went up by 45.4%.

Another survey shows that fruit and vegetables have seen the biggest price rises - up by 30% at leading supermarket chains in the UK over the past year. Retailers are blaming poor crop harvests and high supply chain costs.
But at least the shoppers in the UK have choice and they are making the most of it, according to consumer research.

In the last 12 months, 41% of shoppers have switched to cheaper brands, with two-thirds searching for promotions and deals more often than a year ago. Hard discounters have become more popular too, forcing big-name supermarkets to compete more on price than they used to.

MICHAEL BRISTOW, BEIJING, CHINA

Those in charge of the Chinese economy received some welcome news this summer - inflation fell to its lowest level in more than a year.

Earlier in 2008, prices - particular for basic food items such as pork and eggs - had been rising faster than at any time in the past decade.

Chinese shoppers at a market
Chinese people are sensitive to price rises for everyday items
Shoppers across the county complained that they had cut back on the kind of food purchases they make every day.

It was a worrying time for the Chinese leadership. As in other countries, inflation has sometimes led to street protests in China. In a keynote speech given to China's parliament, Premier Wen Jiabao said tackling inflation was top of the government's agenda.

But even in the midst of this bad news, Chinese officials said they were confident that they would get inflation under control.

They claimed the food price rises were the result of temporary supply problems and not because of long-term shortages.

That confidence now seems to have been well-placed. Beijing shoppers say prices are still going up, but more slowly than before.

A senior finance official recently predicted that inflation in China would slow to 3% in 2009 from a high of 8.7% earlier this year.

Having largely escaped the worst effects of the global financial crisis, economists are urging China to concentrate on turning that prediction into a reality.

And the government will need to, because Chinese people remain acutely sensitive to price rises, particularly for everyday items.

LIZ BLUNT, ADDIS ABABA, ETHIOPIA

It is easy to tell when one of the local "kebeles" in Addis Ababa is selling wheat - residents cluster outside hoping to be able to buy a sack of half-price grain and unemployed youngsters hang around hoping to earn a little money by carrying their sacks.

A woman with wheat in Addis, Ethiopia
Wheat prices in Addis are higher than in other capitals

The "kebeles" are a leftover from communist times - part local government offices, part community centres, part instruments of social control. Now the Ethiopian government is using them to distribute subsidised wheat.

Food prices have more than doubled in the past year here.

It was easy at first to blame world prices, market forces and globalisation. But, with wheat prices in Ethiopia much higher than world prices, it looked as if there would be a lot of profit to be made by importing wheat, yet market forces show no sign of bringing down the price.

The government's attempts to flood the market have cost a lot but have had little effect. If you are lucky enough to be at the front of the queue when the wheat arrives, you can buy a 100 kilo sack for 350 birr (around $35; 25 euros).

But the markets are still selling wheat for 600 or even 700 birr per sack. Not surprisingly, much of the subsidised wheat is taken straight down the road to the market where it is sold for twice the price.

Perhaps merchants and farmers are being greedy, but more likely there is just not enough food in the country.

JONATHAN HEAD, BANGKOK, THAILAND

Rice - the staple crop in this part of Asia - reached record prices this year. Even after falling back from highs of around $1000 (735 euros; 573) for a tonne of good quality rice, to $600-800, it is still double what was being paid last year.

A female rice farmer in Cambodia
Rising rice prices have not generated more cash for farmers
Yet the majority of farmers - who farm small plots of land of three hectares or less - have taken home very little of this bonanza. The reasons are complex, and vary from country to country, but they underline a simple fact: whereas driving up the price of other smallholder agricultural commodities such as coffee or rubber often does enrich those who work the land, it rarely works that way in the case of rice.

Many small rice farmers do not actually grow enough for their families to eat so they still have to buy rice at market prices. In Cambodia, for example, despite the government's pride in becoming one of the world's ten largest rice exporters, only a third of rice farmers produce any surplus they can sell - and one fifth of the population does not get enough to eat.

Farmers usually have no storage facilities, so they need to sell their rice the moment it is harvested

This lead to a bizarre situation where the government planned to sell 1.6m tonnes of locally grown rice on world markets this year, but was also forced to ask the Asian Development Bank for a $38m food security aid package for Cambodians who could not feed themselves.

Thailand - the region's largest exporter - has done well out of rising prices, but its farmers have not as most of the profits have gone to the middlemen. Farmers usually have no storage facilities, so they need to sell their rice the moment it is harvested.

As prices started to ease from their highs in May, almost everyone in the region breathed a sigh of relief.

DANIEL SCHWEIMLER, BUENOS AIRES, ARGENTINA

There is no doubt that food prices in Argentina are rising - you just need to ask any shopper. But to get an idea of just how much will depend on who you talk to.

Argentina's official statistics office, the INDEC, says inflation is under control, at around nine percent a year. But shoppers, independent economists, newspapers and even some staff at the INDEC say those figures do not reflect the reality. Prices, they say, are rising at more than 20% annually.

Argentine farmers protest
Government measures to control food prices have sparked strikes
About one third of the Argentine wage goes on food, and meat takes up a fair amount of space in the basket. Argentines are the biggest per capita consumers of beef in the world and the government has worked hard to keep the price down - negotiating with producers and restricting exports.

But soya has become the new Argentine beef. They aren't eating it but exporting it - mostly to China and India. The little cream bean was, until recently, fetching high prices on world markets and has been the driving force behind Argentina's economic recovery from the crisis it suffered seven years ago.

More and more land previously used for other crops or for pasture is being turned over to the lucrative soya crop, reducing supplies and pushing up prices.

Earlier this year farmers nationwide protested against government plans to increase export taxes, mostly on soya. The four-month protest and the worst drought in a century in Argentina's northern provinces have both had an effect in a country which produces nearly all its own food and imports little.



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