World braced for food shortages as weather hits crops globally

The world is poised for a global shortage of food this year as various weather events across the world threaten a crisis. The US for example is suffering from a drought that is likely to decimate the maize harvest. Average wheat prices are also approaching the 2008 levels which cause multiple food riots in some 30 countries of the world.

The US drought is likely to have the most impact, as a country that is the largest exporter of corn, soy and wheat. Prices for these crops have increased by up to 50 per cent as a result of the losses.

Other areas of the world have been affected too. In Russia, flash flooding is likely to affect the wheat harvest, whilst the UK’s crop has been damaged by the incessant rain. South America is another region in drought, and the soy harvest is likely to be impacted as a result.

The weather is not the only reason however. The demand for biofuels means land and crops that could be used for food are being used for fuel instead. As extreme weather continues and global demand for food increases, biofuels could become the target for criticism.

The pattern of food price rises will not necessarily be straight forward however. Whilst some crops such as wheat directly impact the price of bread and flour, crops such as corn and soy are likely to impact the price of meat. As the cost of these important feed crops goes up, farmers are likely to slaughter younger animals to avoid feeding them, bringing prices down before a spike inevitably follows.

Of course these impacts will disproportionately affect those in developing countries, where people spend as much as 75 per cent of their income on food, compared to around 15 per cent in the developed world. This makes them more liable to suffer from price rises. The price hike is likely to damage the economic recovery as well, which to an extent depends on the developing world to create a stimulus.