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