CAUSES OF THE CRISIS 15


Figure 2.4 Timeline of events contributing to the food crisis 1996


1998 2000 2002 2004 2006 2007


Strong growth in demand, based on increasing population, strong economic growth, rising per capita meat consumption


Slowing growth in agricultural production


Declining demand for stocks of food commodities Escalating crude oil prices


Rapid expansion of biofuels production


Dollar devaluation


Speculation in futures markets Rising farm


production costs


Demand factors in gray Supply factors in white


Adverse weather Large foreign exchange reserves


Aggressive purchases by importers


Exporter policies Importer policies


Source: Adapted from Trostle (2008). Notes:


The authors added “Speculation in futures markets” to the original figure because this factor was excluded from Trostle’s (2008) analysis on the grounds that there was insufficient evidence at that time (R. Trostle, pers. comm., February 2010). In addition, the authors interpret all these factors as hypotheses only, whereas Trostle’s original figure referred to factors he considered likely causes of the crisis.


has also been a larger importer of cereals, but has actually decreased its cereal imports in recent years (Headey 2010). So even though it is true that Asian countries have indeed experienced various increases in their consumption of fruits and some meats, this has not translated into larger cereal bills. If there is a China–India story, it is more indirect. First, China, and to a lesser degree India, are demanding more oil and more commodities. China has contributed about 30 percent of the increased demand for oil from 2000 to 2006 and will continue to do so from 2007 to 2030 (Figure 2.5). Monthly import data in Figure 2.6 also suggest that rising oil imports in China could have contributed to rising oil prices, although the surge in oil prices is far more dramatic than the upward trend in Chinese imports. Of course, readers might be skeptical that Chinese demand for oil and metals could cause such a sudden upsurge in prices, given that China’s demand


2008


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113  |  Page 114  |  Page 115  |  Page 116  |  Page 117  |  Page 118  |  Page 119  |  Page 120  |  Page 121  |  Page 122  |  Page 123  |  Page 124  |  Page 125  |  Page 126  |  Page 127  |  Page 128  |  Page 129  |  Page 130  |  Page 131  |  Page 132  |  Page 133  |  Page 134  |  Page 135  |  Page 136  |  Page 137  |  Page 138  |  Page 139  |  Page 140  |  Page 141  |  Page 142