Global food prices may rise 4.4% to a record by the end of the year, driven by demand for meat, oilseeds and grains used to make ethanol, adding to costs that mean inflation is accelerating from the U.S. to China.
The United Nations’ Food Price Index may climb to 240 points from 229.84 last month, said William Adams, a fund manager at Zurich-based Resilience AG, which has US$22.2-million of assets. Global corn stockpiles are shrinking the most in seven years, inventories of nine edible oils will drop to the lowest since 1974 and U.S. beef stocks will be the smallest since 1999, the U.S. Department of Agriculture estimates.
“The stockpiles are being severely depleted,” said Mr. Adams, who correctly forecast gains in heating oil and gasoline prices last year. “Eventually it gets to the consumer. The U.S. government isn’t subsidizing pork chops like it is ethanol.”
The cost of living in the U.S. rose at its fastest pace since December 2009 in the 12 months ended in March. Chinese consumer prices rose last month by the most since 2008. The People’s Bank of China raised borrowing costs four times since October and the European Central Bank increased rates on April 7 for the first time since 2008. World Bank President Robert Zoellick said April 16 that the world is “one shock away” from a crisis in food supply and prices.
Finantial Post
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http://business.financialpost.com/2011/04/26/food-prices-set-to-hit-record/
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