12 CHAPTER 2


Figure 2.3 Trends in nominal prices of cereals and oil, January 2003–November 2009


Price index (January 2003  1) 5.5


Rice


4.5 5.0


4.0 3.5


3.0 2.5 2.0 1.5 1.0


0.5


Soybeans Wheat Maize Petroleum


Source: Calculations by the authors using data from IMF (2009a).


order of 50–90 percent. Although seemingly trivial, this speed component of the crisis is important, because it might focus suspicion on explanations that involve short-term factors rather than long-term changes.4 A second fact that may hold some significance is that prior to the cur- rent price rise the real prices of staple foods were at an all-time low after declining for the best part of 30 years. Whether these long-run trends and the similarities to the 1972–74 crisis are truly integral components of the current crisis remains to be seen, but—as is explored below—there are good grounds for the argument that they are.


A third fact that has yet to receive much attention is that the prices of a wide range of commodities increased sharply. The surge in the price of oil is well known, of course, as is its being a leading factor in the 1974 food crisis, but all energy prices have risen by 80–120 percent (so have the prices


4 Of course, as will be shown, this is not necessarily the case. Long-term factors could have depleted stocks, which ultimately would have contributed to price increases.


Jan 2003 May 2003 Sep 2003 Jan 2004 May 2004 Sep 2004 Jan 2005 May 2005 Sep 2005 Jan 2006 May 2006 Sep 2006 Jan 2007 May 2007 Sep 2007 Jan 2008 May 2008 Sep 2008 Jan 2009 May 2009 Sep 2009


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