The world could be one crop failure away from an actual food crisis. Market panic has already started.
When all goes well, thunderheads tower above India’s southwestern state of Kerala in early June, drenching the region’s vital rice fields and ensuring a bountiful harvest. From there the summer monsoon plods northward to soak the baking plains and irrigate vital breadbasket regions that feed 1.1 billion people before arriving at the foot of the Himalayas in August. Forecasting this complex meteorological process has always been an obsession within India, but this year the world will be watching. Changes in the monsoon cycle can shrink India’s total grain harvest by up to 20 percent, creating a shortfall of 30 million metric tons. During India’s last crop failure, in 2002, the country had a massive reserve to fall back on. “Now,” says Usha Tuteja, an agricultural economist at Delhi University, “we don’t have enough buffer stocks to make up for one bad year.”
India isn’t the only danger zone today. A major storm battering the Philippines or Bangladesh at the wrong moment, a pest or plant-disease outbreak in Vietnam, or floods along China’s Yangtze River like those that occurred in the mid-1990s would put serious strains on global grain reserves already depleted to levels not seen since the 1970s. Global markets are behaving as if a food shock is imminent.
In recent months the commodity prices of rice, wheat and corn has jumped 50 percent or more, pushing retail prices to levels unseen in a generation and prompting grain-exporting countries to curtail trade to suppress domestic inflation. On March 20, the World Food Program issued an emergency appeal for more funding to keep aid moving to the world’s poorest countries. Last week World Bank president Robert Zoellick called for urgent global action on the part of rich nations “or many more people will suffer or starve.”
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