British tourism bucks the trend!

The Independent on Sunday reports that 'grounded by the diminishing value of the pound and fears about the recession, record numbers of Britons will choose to holiday at home this summer. New figures suggest that 2009 could be a bumper year for British tourism.' After years of chichi mini-breaks in boutique hotels, the humble self-catering holiday is coming back, with Hoseasons, Butlins and the Youth Hostels Association (YHA) all reporting increased business. "Bookings for 2009 are up 20 per cent on last year," said Peter Joyner of Hoseasons. "Because we are the biggest self-catering firm in the UK we are a good barometer of what is going on in the rest of the industry." "UK holidays are usually cheaper than going abroad. If you go to a cottage in Britain you can just pack the car up and take all your own food. You've got greater control. When you go abroad you've got unknown elements," said Mr Joyner. Butlins also reported that bookings for the school summer holiday are up 15 per cent on last year. The YHA said January bookings were up on 2008.

Link to article

Are self-catering holidays in the UK and the other holidays referred to in the article examples of inferior goods? Think about the income elasticity of demand for such holidays.

Why are food prices rising?

Food prices have been rising steadily in the past few months and the effects are being felt globally. As agricultural commodities such as wheat and dairy trade at record highs, some governments, such as Russia, are implementing price controls on selected types of bread, cheese, milk, eggs and vegetable oil. But why is food getting more expensive? What role do biofuels play and how has the weather affected crop yields this year? How does the cost of oil factor into the price of food? A really informative FT multimedia feature explains. Click here for link.

The biggest threat to the world economy isn't the sub-prime crisis. Nor is it the credit crunch or the US recession. It's food.

Food prices are soaring. Not since the early 1970s have we seen wheat prices jump so dramatically. Rice prices have also spiked upwards. For the rich developed countries, the rise in food prices is, so far, not much more than a minor inconvenience. For other nations, though, the recent gains in food prices threaten severe economic and social distress. Rice, after all, is the staple food for half of the world's population. What should they do if prices suddenly go through the roof? This is a really good analysis, by Stephen King, of the demand, supply and policy factors behind this dramatic rise in world food prices and its potential impact.
http://www.independent.co.uk/news/business/comment/stephen-king/stephen-king-food-protectionism-could-provoke-a-crisis-on-a-par-with-1970s-oil-shocks-812753.html

The rising price of bread

The price of bread is the highest it has ever been. It's all down to the rising cost of wheat, which has doubled in the past year alone. What is going on? A good analysis of the complex pressures across the world that are affecting the bread market.

http://www.guardian.co.uk/environment/2008/apr/16/food.ethicalliving

Do you think prices are likely to go higher? How could consumers respond? How price elastic is the demand for bread? What type of good is bread?

Agflation

Agflation: The real costs of rising food prices. Farmers can't keep up with rising demand. The world is in a food crisis that's already boiled over in some places. A really good overview of the situation from Reuters. Look at the world map to locate the crisis points then explore the policy responses. What effects will these have in the countries concerned and in the rest of the world?
http://www.reuters.com/news/globalcoverage/agflation

India introduces rice export ban

The Indian government has banned the export of non-basmati rice to try and control soaring domestic food costs. The decision, one of a series of measures to curb inflation, was taken during an emergency cabinet meeting. Traders say rice prices rose by 10% last year,

The price for exports of aromatic basmati rice has also been raised to $1,200 per tonne to discourage exports. The move could have an impact on rice prices globally as the country is the third largest exporter of the grain - a staple food in many countries.

http://news.bbc.co.uk/1/hi/world/south_asia/7323713.stm

http://news.bbc.co.uk/1/hi/business/7328087.stm

Also, a good article and video from the BBC News site on the global rise of food prices.

http://news.bbc.co.uk/1/hi/world/7284196.stm

http://news.bbc.co.uk/1/hi/world/7289550.stm

Surge in coal prices

Coal prices have surged to record levels, according to BBC news. According to one trader, "supply is so tight at the moment that users just have to pay whatever producers are asking, and if they sit around and wait, they will either have to fork out even higher prices or be told there is no more tonnage available".

1. Read the article and think about why supply is so tight.
2. Draw a demand and supply diagram to show how the equlibrium price has changed.
3. Identify other markets that are likely to be affected by the increase in coal prices.

http://news.bbc.co.uk/1/hi/business/7225682.stm