The socio-economic and environmental impacts of soaring food and oil prices Alicia Bárcena EXECUTIVE SECRETARY Economic Commission for Latin America and the Caribbean ECONOMIC AND SOCIAL COUNCIL DIALOGUE WITH THE EXECUTIVE SECRETARIES OF THE REGIONAL COMMISSIONS New York, 7 July 2008
13
Embed
The socio-economic and environmental impacts of soaring food and oil prices Alicia Bárcena EXECUTIVE SECRETARY Economic Commission for Latin America and.
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
The socio-economic and environmental impacts of
soaring food and oil prices
Alicia BárcenaEXECUTIVE SECRETARY
Economic Commission for Latin America and the Caribbean
ECONOMIC AND SOCIAL COUNCIL DIALOGUE WITH THE EXECUTIVE SECRETARIES OF THE REGIONAL
Energy AgricultureFood Fats and oilsGrains Non-energy commodities
QUARTERLY AVERAGE PRICE INDEX FOR ENERGY, AGRICULTURAL COMMODITIES AND FOOD(II Q 2006 – I Q 2008, annual average 2005 = 100)
What is the problem?
Source: Economic Commission for Latin America and the Caribbean (ECLAC).
FOOD PRICE INCREASES(Percentages)
-40
-20
0
20
40
60
80
100
120
140
160
180
200
220
240
Food index Wheat Maize Rice Soybean Soya oil
April 2008-April 2007 April 2008-April 2006
INTER-ANNUAL GROWTH RATES IN THE CONSUMER PRICE INDEX, BY COUNTRY, 2002-2007
During the last five years food inflation has been higher than general inflation in most
LAC countries
0.0
5.0
10.0
15.0
20.0
25.0
30.0
PE PA EC CL SV MX BR HN CO BO GT NI JM UY AR CR PY TT DO HT VZ
CPI Food CPI General
Source: Economic Commission for Latin America and the Caribbean (ECLAC).
Causes
• Multiple socio-economic and natural factors, both structural and temporary in nature
• Financial volatility and slowdosn in world growth
• Global surge in inflation (6%-2006 to 10%-2008 in LAC)
• Increased world demand generated by Asia (China and India)
• Supply shocks: key countries stopped exporting (Indonesia)
• Rise in prices of oil and oil-based agrochemicals (100%-fert)
• Growing demand for biofuels and effect of subsidies (US+EU)
• Speculative purchases on future markets
• Climate-related factors
THE WORLD
• A dry spring in Northern Europe with floods during the harvest period
• Second consecutive year of drought in Ukraine and Russian Federation
• Third consecutive year of drought in Australia; the worst multi-year drought in a century
Climate-related factors affected production in 2007
THE REGION
• A late frost in some important wheat-growing areas in the United States
• An unusually hot and dry summer in Canada during the harvest period
• A late frost in Argentina followed by a drought
These factors are partially responsible for poor yields of maize, wheat and oats in the last few years.
BiofuelsEthanol: rising production from maize in the United States from 2003 onwards
Biodiesel: rising production in the European Union since 2004 and in the United States since 2006
Source: R. Trostel, Global Agricultural Supply and Demand, May, 2008.
The region is a net food exporter, but most of the countries are net importers and at least one faces a critical situation
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of A. Valdés and W. Foster, “Agricultural Trade Liberalization and the Rural Economy in Latin America and the Caribbean”, document presented at the workshop Rural Development and Agricultural Trade, Washinhton, D.C., Inter-American Development Bank, 2005.
FOOD AND AGRICULTURAL NET BALANCE IN LATIN AMERICA AND THE CARIBBEAN(Averages 2000-2002, in United States dollars)