Tuesday, February 26, 2008

Why food prices rising?

This is not a new topic but a serious one. Many people talked about it, it has become part and parcel of our life nowsday. We have no choice but to pay the higher price for the food. But why food is getting more expensive? Below are some of the valid points that you probadly already know but you are not realise that:

1. Changing diet in emerging market. With demand for meat and dairy product rising fast in rapidly growing economies such as India and China, producers struggle to keep up with the demand

2. Subsidies and market distortion. When subsidies are cut, price of food will go up. When there is an intervention in a given market by a governing body, price ceiling and price floors will be determined. Thus prices will fluctuate.

3. Impact of climate change. Extreme weather events have impacted crop production around the world. Natural disasters will bring down the production of the food such as grains that form impartant part of human's consumptions. With less supply, price will go up.

4. Rising input prices. There is interrelationship between the rising costs of oil, fertiliser, and transportation cost and soaring commonidities prices. When these prices are up, the price of the food will also be up.

1 comment:

Alen said...

Either we eat less or we buy less expensive item. Avoid going to expensive place or reduce the frequency.

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