By Paul E. Roberts
For anyone wondering where food prices are really headed, the news that Beijing has begun buying up farmland in Africa and South America offers a troubling hint. When China began acquiring oil fields in the 1990s, it signaled both the end of China's self-sufficiency in oil and the start of a competition between China and other big oil importers that helped push crude prices to their current record levels. That the world's most populous nation now seeks to lock up pieces of foreign food production not only confirms that China has reached the end of food self-sufficiency as well, but suggests that Western hopes for a quick end to today's food-price crisis could be overly optimistic.
According to conventional wisdom, our food crunch is a temporary glitch. Because grain shortages are being caused by many factors — new demand by biofuel refineries, drought in Australia, among others — the pain can't last. Eventually, drought will abate. Biofuels programs will be reined in. Most important, farmers will plant more acres and boost global supplies, just as they always have during shortages. Food may never again be dirt cheap, but by next year, prices for key crops will swing back to a more moderate line. Right?
It's a comforting picture, to be sure. But as Beijing's real-estate spree suggests, food prices are being driven by deeper, more fundamental factors that won't be so easily resolved.[snip] (Read full editorial here.)
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