The New Global Food Crisis

World Bank President says, A new Global food crisis just ahead

Rising food prices, which the World Bank says have hit “dangerous levels,” have put the issue of food security in the Global spotlight during the past week.

From Asia to the Middle East and to Latin America, the trends of food prices have aroused widespread public concerns Globally and in the developing world in particular.

World Bank Group President Robert B. Zoellick warned Tuesday: “Global food prices are rising to dangerous levels and threaten tens of millions of poor people around the world.”

Rising food prices have driven an estimated 44 million people into poverty in developing countries since last June, as food costs continue to rise to near Y 2008 levels.

The latest edition of Food Price Watch, a research publication by the World Bank, showed that its food price index rose by 15% between October 2010 and January 2011. It is 29% above its level a year earlier and only 3% below its Y 2008 high.

The Big Q: What are the main factors behind the food price spikes?

The Key lies in the loose monetary policy of the United States, the financialization of the Global farm produce market, the development of bio fuels, and the extreme weather events affecting harvests in the World’s main grain-producing areas.

The US Federal Reserve is seen as driving up food prices by turning on its USD printing presses, and devaluing its own currency, one observer says “The food crisis is a Dollar crisis.”

Several years ago, a study by the World Bank concluded that bio fuel development in the United States and the European Union were directly responsible for the explosion in grain and food prices Worldwide.

The study, once Confidential, was revealed by the London-based Guardian newspaper in Y 2008 causing a Worldwide sensation.

And the increasing financialization of Global agricultural product markets in recent years has also made food prices more volatile as investor speculation, and panic can increase the range of food price fluctuations.

When prices of staple foods rise, its impact varies greatly between rich and poor countries from minimal to almost distressing.

In some of the poorest countries in the World, people spend a significant portion of their household expenses on food and feel the pinch as food prices rise.

In efforts to stem spiraling food prices, the International community should strengthen co-ordination and measures should be taken to urge the developed countries to adopt responsible monetary polices and tighten supervision over staple commodities markets.

As for the developing World, the best way out of the food crisis is to increase agricultural inputs, and improve productivity to boost agricultural production and grain supply. That is coming.

Singapore Stocks May Extend Losses

(RTTNews) - The Singapore stock market continues to alternate between positive and negative finishes through the last six trading days, since the end of the five-day losing streak in which it had retreated more than 135 points or 4.4 percent. The Straits Times Index finished just above the 3,070-point plateau, and now analysts are forecasting further consolidation when the market kicks off trade on Tuesday.

The global forecast for the Asian markets is fairly negative, thanks to the growing unrest in Libya and its effect on the oil market. Energy stocks are therefore expected to fall, as are the tech stocks. The European markets finished lower and the U.S. bourses were closed for President's Day - and the Asian markets are also expected to track to the downside.

The STI finished modestly lower on Monday, following softness from the industrials and casinos.

For the day, the index shed 16.32 points or 0.53 percent to finish at 3,070.60 after trading between 3,062.16 and 3,080.88. Volume was 1.26 billion shares worth 1.27 billion Singapore dollars.

Among the decliners, Cosco Corp. Singapore shed 1.4 percent, while Genting Singapore eased 0.5 percent and Huan Hsin Holdings retreated 2.6 percent.

The lead from Europe is broadly pessimistic as markets fell on Monday, with mounting political unrest in Libya raising concern about oil supplies and prompting investors to cut exposure to risk.

Libyan leader Muammar Gaddafi's son vowed to fight until the " last man standing," as the protests against his father spread to capital Tripoli on Sunday. In an address on national TV, Saif al-Islam has warned of a civil war and claimed that the Army stood behind as a " leader of the battle in Tripoli" and would enforce security at any cost. It was the first official reaction from the Libyan authorities since the unrest began.

Thousands of protesters, who gathered in the capital demanding an end to the four-decade rule of Africa's longest-serving leader, set vehicles on fire and threw stones at billboards of Gaddafi. Police opened fire and used tear gas to disperse the crowd.

In economic news, Eurozone private sector activity expanded in February at the strongest pace since July 2006, data from Markit Economics showed Monday. The Markit Flash Eurozone Composite Output Index rose to 58.4 in February from 57 in January.

At the same time, the manufacturing Purchasing Managers' Index came in at 59, the highest level since June 2000 and up from 57.3 in January. Consensus forecast called for a reading of 57. Likewise, the services PMI advanced to 57.2 from 55.9. The index stayed above the expected level of 56.

The FTSEurofirst 300 index of pan-European blue chips closed 1.32 percent lower at 1,171.41 points. National benchmark indexes fell in all but one of the 18 western European markets. The U.K.'s FTSE 100 index fell 1.12 percent to 6,014.80, while France's CAC 40 index dropped 1.44 percent to 4,097.4 and Germany's DAX index slipped 1.41 percent to 7,321.81.

In economic news, Singapore's domestic wholesale sales rose a seasonally adjusted 7.2 percent on quarter in the final three months of 2010 following a 9.1 percent drop in the preceding quarter, the Department of Statistics said on Monday. Excluding petroleum, wholesale sales rose 2.7 percent compared to a 5.8 percent drop in the September quarter. On a yearly basis, domestic wholesale trade was down 1.8 percent in the December quarter following a 5.3 percent drop in the previous quarter.

ALL HELL BREAKS LOOSE IN LIBYA AS JETS BOMB PROTESTERS

Image: Al Jazeera

All hell appears to be breaking loose in Libya.

 

According to Al Jazeera, military jets have bombed protesters in Tripoli.

Other military jets have reportedly refused orders to bomb protesters and have instead flown to Malta.

" Senior colonels" in the Libyan military have reportedly fled to Malta.

The US and Europe have warned Gaddafi that the violence must stop.

Brent Crude (oil) has soared above $105 a barrel.

Events are happening so quickly that they're hard to keep up with.

Key links for latest below:

Al Jazeera's live-blog has the latest here >

Watch Al Jazeera's English stream here >

EARLIER: Libyan Protesters Take Control Of Cities, Oil Wells Shut Down, Gaddafi Faces Mass Defections

Work starts China-backed Bahamas resort project

(AP:NASSAU, Bahamas) It's being called the largest project of its kind in the Caribbean _ a mega-resort in the Bahamas with more than 2,000 rooms that will be built and financed by the Chinese government.

Baha Mar is a $3.4 billion project in the Bahamian capital of Nassau. It will include four hotels, a golf course and the Caribbean's largest casino.

Baha Mar President Don Robinson said it will open in December 2014. Developers held a groundbreaking ceremony Monday with Bahamian and Chinese government officials.

China's Export-Import Bank is financing Baha Mar and the state-owned construction company will build much of the project.

ECB resumed bond buying amid Portugal worries

(AP:BRUSSELS) The European Central Bank said Monday it bought euro711 million ($971 million) in government bonds last week as concerns over Portugal's debt crisis flared up again.

The figures include purchases made Thursday and Friday the week before, when analysts said the ECB started buying bonds again after a two-week break.

Because of the way the ECB settles its bond purchases, transactions made late in the week are reported with a delay.

Since it started its bond buying program in May, the Frankfurt-based bank has spent about euro77 billion on the bonds of highly indebted countries like Greece, Ireland and Portugal.

Buying bonds supports their prices and helps keep a government's borrowing costs in check.

Monday's figures represent the largest weekly purchase since late December, when fears spiked that Europe's debt crisis, which has already pushed Greece and Ireland into multibillion-euro international bailouts, would soon spread to Portugal _ and possibly much larger Spain.

However, they are still far below where they were in early summer, when the ECB often spent several billion euros a week in an attempt to control market panic in the wake of the bailout of Greece.

Concerns over Spain's ability to repay its debts have abated slightly, but the yields, or effective interest rates, on Portuguese bonds hit a euro-era high last week. Most economists believe that an international rescue of the country is only a matter of time.

In top of its high public debt, Portugal's economy has been growing at an aenemic rate while households have been spending more than they earn.