Thursday, May 26, 2011

Will the Middle East Starve?

The numerous Middle East revolutions may put an end to the prevalent kleptocracy that makes these countries such economic basket cases.   Unfortunately that does not change demographic reality of the world, and their own region in particular.  More people in the world without a commensurate increase in food production means rising food prices.
Liam, Pleven and Matt Bradley, Wall Street Journal, May 19, 2011
Wheat prices jumped on Wednesday, taking the week's gains to 17%, an ascent that threatens to put fresh pressure on fragile Middle East governments that import the grain to feed their people.
Wet weather in the U.S. and dryness in Western Europe are driving the recent rise. Wheat futures jumped 53 cents, or 7%, to $8.17 per bushel Wednesday, the biggest single-day dollar gain in more than seven months, and are now up 91% in less than a year.
Rising wheat prices jarred global markets last summer, amid a harsh Russian drought, and have stayed high for months. Some analysts worry the bad weather that pushed prices up this week could further curtail supplies and send prices even higher.
That could be a boon to farmers in major exporting countries, but a threat to consumers around the world, and especially in the Middle East. Wheat is the biggest dietary staple in much of the region, providing cheap nutrition in bread, pasta and couscous.
"People are starving and bread is an easy way to feel full. Meat and fish are very expensive," said Fatheya Ahmed, a Cairo widow who pays about 17 cents to buy 20 small discs of subsidized bread, enough to feed her and her four children for two days. "We just eat bread and a piece of cheese"...
Middle East governments are hoping for bumper local crops this spring, which could put off or reduce a stiff bill. Many saw strong rains early this year, boosting chances for good harvests in coming weeks.
But even strong crops aren't likely to cover domestic needs, and importing wheat and other food makes it harder to provide the better jobs and higher wages Egyptians increasingly demand, said Mr. Sabra of Eurasia Group.
"Will the government be able to deliver? I don't think it will be easy," Mr. Sabra said of Egypt's leaders. If they can't, he added, "then they'll be in trouble."
The numbers for Middle East consumption with some comparison points follows.  The article feels the need to state the long historical background of wheat in the Middle East in detail.  Given that it was first planted as a crop in what is now Iraq, and it was Middle Eastern farmers who spread the agricultural revolution to Europe, the need for these details is a little amusing.
Per Capita Wheat Consumption
Tunisia            478 pounds
Algeria            464 pounds
Egypt              409 pounds
Iraq                 288 pounds
EU                    244 pounds
Thailand           32 pounds

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