Link original: http://www.marketskeptics.com/2009/11/200910-food-crisis.html Tuesday !

o"em#er $ 2009

2009/10 Food Crisis

by Eric deCarbonnel %elow is another section from the ma&or article. This section is not completely finished #ut is fairly close 'needs another 2 or $ hours of work(. --------------------------------

1) Chinese demand driving commodity prices ) ha"e #een predicting hyperinflation would start in *hina leading to the dollar+s collapse. !ow it is happening. *hinese efforts to #oost domestic consumption while supporting e,ports with its dollar peg and adopting loose monetary policy are creating enormous demand for raw materials. -s a result *hina is sucking up the world+s supply of raw goods putting massi"e upwards pressure on commodity prices especially soy#eans. The dollar peg fuels demand from Chinese export sector .ince the dollar .eptem#er last year the yuan has #een ho"ering around /.0$ as shown in the chart #elow.

-s the *hinese yuan has #een pretty much pegged to the 1. dollar and the dollar has #een 2uickly losing "alue the yuan has depreciated /.9 percent since 3e#ruary this year greatly helping *hina4s e,port sector. .eptem#er+s month-on-month import and e,port num#ers showed the se"enth consecuti"e month of positi"e growth since 5arch. 6hile *hina+s e,ports ha"e dropped significantly its market share has not and its trade

surplus keep growing. The dollar peg #y su#sidi7ing *hina+s e,port sector is creating tremendous demand for raw materials. Chinas exploding money supply driving up demand -s ) e,plained in my article on 8yperinflation in *hina *hina4s dollar peg and trade surpluses fuel monetary inflation.

The !"s trade deficit re#uires China to print money$ The little discussed downside of the dollar peg is all the money *hina has to print to maintain it. *hina+s *entral %ank puts the e,tra dollars it recei"es from its trade surplus into its growing foreign reser"es and then prints yuan to pay *hinese e,porters. This results in an increase in *hina+s #ase money supply #y an amount e2ual to the increase in its foreign e,change reser"es. %hile China"s a&ility to 'eep accumulating ! reserves is endless( its a&ility to 'eep its money supply under control is not)

*hina4s money supply has e,ploded since *hina re-pegged. %ei&ing has scrapped lending 2uotas adopted a loose monetary policy and kept interest rates at four-year lows to #olster li2uidity and promote growth. The policy has o#"iously worked: *hinese #anks ha"e e,tended a massi"e 0./9 trillion yuan ':1.29 trillion( in new loans this year. To put this lending in conte,t consider the following: -( 0./9 trillion yuan far e,ceeding the *hina4s initial full-year target of ; trillion yuan. %( !ew #ank lending in the first nine months of this year is up 2;0 percent from the same period last year. *( *hina has lent out more money in the first four months of this year than in the whole of 2000. The effects of all this o"ere,tension of credit can #e seen in the graph of *hinese money supply growth #elow.

*hina4s increasing supply of <uan means that a lot more money is chasing its domestic supply of commodities and #ank lending is multiplying the effect of the go"ernment+s spending. -s a result the prices of commodities in *hina are higher than the rest of the world and this price im#alance is leading to record commodity imports '*hinese producers are #uying commodities a#road rather than pay higher domestic prices(. *hina has no plans to a#andon its loose monetary policy. Chinese %or'ing To *oost +omestic Consumption *hina is turning to its poorer residents to help re"i"e growth instead of 6estern consumers. )t is dismantling all the measures it put in place o"er the years to suppress demand to fight inflation. )t has dropped restrictions on purchasing property eliminated price controls got rid of loan 2uotas lowered interest rates ceased its sterili7ation efforts etc= *hina has also #een speeding up economic and political reforms to #oost domestic consumption. - few of the measures include: 1( >aising su#sidies for auto replacements from 1 #illion yuan to ; #illion yuan.

2( -llocating 2 #illion yuan to encourage home appliance upgrades. $( -llowing non-deposit-taking institutions to offer consumer loans to *hinese citi7ens ?( .lashing the minimum financial re2uirement for commercial property in"estments for the first time in 1$ years 'from $; percent to 20 percent(. ;( @armarking / #illion yuan '090 million dollars( for low-rent house #uilding pro&ects across the country. /( )ssuing new rules to allow insurers to in"est in corporate #onds without #ank guarantees and allow smaller insurers to trade stocks directly. 9( *reating its own A!-.B-CA 'the *hi!e,t(. 0( @ncouraging the creation of new commodity deri"ati"es 'trading in steel futures rice futures and poly"inyl chloride 'DE*( futures ha"e #een launched this year(. 9( Dromoting .hanghai as a glo#al financial center and a ma&or gold trading market. 10( .upporting ele"en national research programs with at least /2.0 #illion yuan. 11( Cuickly e,panding its social security net and allocating 920 #illion yuan ':10/ #illion a 29.? percent increase from prior year( for education medical and health care social security employment low-income housing and culture. 12( Be"eloping its own credit rating agencies and so"ereign credit rating standards 1$( Fpening its capital markets and currency to the world. *hina4s efforts are working. Bomestic consumption has #ecome the dri"ing force of the nation+s growth. *hina has already surpassed the 1nited .tates last Ganuary to #ecome the world+s largest auto market #ased on monthly sales. *hinese we# shopping is reaching record highs. -dditionally with a significant part of *hina+s population at the age of peak consumer spending domestic consumption holds the potential for a period of e,tremely rapid growth o"er the ne,t decade. *hina+s efforts to #oost consumption 'economic li#eration massi"e go"ernment spending etc...( are hugely inflationary creating tremendous hunger for raw materials. Chinese demand driving commodity prices .trong *hinese demand for the raw material is dri"ing up commodity prices across the #oard. *hina is importing record 2uantities of e"erything from wood to sugar. The price of copper used for autos and construction had its #iggest si,-month gain in 22 years as *hinese #uyers #oost imports to records to replenish stockpiles. *hinese demand has also #een a key dri"er of 1. soy#eans prices this year. 3irst 2uarter imports alone were up an incredi#le $1H from the same period in 2000. The *hinese go"ernment has #een purchasing soy#eans to protect the interests of domestic peasants and encourage them to keep planting. This is forcing *hina to import more soy#eans from -merica. @"entually *hinese demand will dri"e up commodity prices to an e,tent which forces it to drop the dollar to contain domestic inflation. Gudging #y its incredi#le le"els of commodity imports this e"ent will happen in the "ery near future. 2) ,ust-in-time inventory system facing collapse .ince 1900 a com#ination of o"ersupply ultra high interest rates and new #usiness practices 2uickly turned the idea of owning e,tra in"entory into financial heresy of the highest order leading to &ust-in-time in"entory management. Gust-in-time in"entory management means that e"erything is deli"ered &ust as it is needed or nearly so which

lowers in"entory le"els and frees up cash for other purposes. The last two decades of low inflation ha"e lulled purchasing managers into #elie"ing that needed materials would #e cheaper tomorrow than today leading to the widespread use of &ust in time systems. )n almost e"ery corner of the glo#e and in almost e"ery organi7ation spartan in"entories ha"e #ecome an essential cost-cutting measure to remain competiti"e. 1sers of commodities and manufactured goods today ha"e #usiness models that rely on weekly or e"en daily calculations to determine their in"entory needs. 3or e,ample 6al-5art tries to keep much of its in"entory on the road in trucks to maintain low costs and fle,i#ility. 1nfortunately there is a pro#lem: &ust-in-time in"entory is COMPLETELY DEPENDENT ON A STABLE DOLLAR. )n a high inflation en"ironment e"ery act of restocking in"entory #ecomes a painful e,perience destroying the &ust in time management4s cost sa"ing &ustifications. )f the dollar goes into a freefall the entire glo#al &ust-in-time system will collapse. .) Catastrophic fall in glo&al food production IIIII*atastrophic 3all in 2009 Jlo#al 3ood DroductionIIIII %ater shortages Ff all the en"ironmental trends that are shrinking the world+s food supplies the most immediate is water shortages. KunfinishedL Longer term the water situation is e"en scarier. Two #illion people face acute water shortage this century as 8imalayan glaciers melt. The Ti#etan plateau 'The glaciers of the 8imalayas( is the faucet for much of -sia+s drinking water and the melting glaciers of the 8imalayas feed the ma&or ri"ers of *hina )ndia Dakistan !epal %hutan %angladesh 5yanmar Thailand Eietnam Laos and *am#odia. The shrinking 8imalayan glaciers which could melt entirely #y 20$; will turn *hinese and )ndian ri"ers like the Janga and the <angt7e into seasonal ri"ers that dry up in summers when irrigation needs are greatest. The countries dependent on the glaciers of the 8imalayas contain 0; percent of the people in -sia and nearly half the world+s population. The situation is an international political time #om#. -ustralia+s 3ood %owl Like The 6orld+s )s Brying 1p This year thousands of acres went unplanted #y *alifornian farmers coping with drought *ities -re >unning Fut Ff 6ater +esertification

Besertification refers the spread of e,isting deserts and the creation of new ones. desertification isn+t the result of glo#al warming 'thought it is possi#le glo#al warming is making it worse(. )t is the result of reckless and e,tensi"e o"eruse of drylands around the world. 19$0+s Bust %owl is a perfect e,ample of desertification. 6hen the 1nited .tates entered an economic recession in the 1920s farmers in 6estern states tried to raise profits #y plowing and planting more acreage with new mechani7ed farming methods. 6ithin a decade a massi"e drought hit the entire country. .trong winds swept across the Jreat Dlains stirring up loose topsoil that had #een displaced #y o"erplowing and o"ergra7ing of cattle. The results were do7ens of epic dust storms that swallowed whole cities in #lack clouds and turned day into night. Today the 1! is warning that parts of the world could #ecome +economic deserts+ un"ia#le for people or agriculture and may ha"e to #e a#andoned. @"en in rich countries people are hitting the limits of what can #e done with money and infrastructure #ecause there simply isn+t enough water anymore. Bisaster is feared as desertification spreads. 1( )n *hina+s northwest desertification has escalated from 1 ;/0 s2 km annually in the 1990s to 2 100-2 ?00 s2 km in the 1990s. Bust storms from the Jo#i desert regularly #low through %ei&ing and the go"ernment+s response is getting more desperate: *hinese authorities ha"e #egun telling hundreds of "illagers that farming will cease and that they will ha"e to gi"e up their animals. 2( .trong desertification processes ha"e #een de"eloping in Latin -merica with se"eral countries of the region as well as significant sectors within some countries in a state of water stress. This situation is pro&ected to worsen significantly o"er the medium term. $( Becades of war and mismanagement compounded #y two years of drought are wreaking ha"oc on )ra2+s ecosystem drying up ri"er#eds and marshes turning ara#le land into desert killing trees and plants and generally transforming what was once the region+s most fertile area into a wasteland. ?( The .ahara desert is encroaching into the !igerian landmass at the speed of /00 meters per annum there#y threatening the country+s food #ase. 5ost "illages in the northern states ha"e already #een o"ertaken #y sand dunes. ;( 90 percent of the water in Lake *had which is considered to #e the si,th largest in the world and is #ordered #y four countries '*had !iger !igeria and the *ameroon( has #een lost to the ad"erse effects of climate change. Lake *had ser"ed as source of fresh water to the more than $0 million people li"ing around its #ank. /( The .ahara Besert is crossing the 5editerranean and the li"elihoods of /.; million people li"ing along its shores could #e at risk. 9( 9? million acres of fertile land along the 5editerranean is turning to desert gi"ing rise to the term .ahelisation 'ie: #ecoming part of the .ahara desert(.

0( )n @gypt #rackish groundwater has already compromised half the country+s farmland. 9( -2uifers around the Do Belta in northern )taly are also showing signs of saltwater contamination. 10( .pain has implemented its first Drogram of !ational -ction against Besertification after recogni7ing that $9 percent of the country is at risk from desertification and is in danger of #ecoming Aeroded fore"erA. 11( - new desert is forming 2;0 km from the +Jarden *ity of )ndia+ %angalore. This new desert is the result of continued indiscriminate water use #y "illage inha#itants e"en as sand from floods and wind started co"ering the region. !ow thousands of acres of land are co"ered #y sand dunes. 12( This .eptem#er .ydney residents woke to scenes from a 8ollywood apocalypse mo"ie as the worst dust storm in 90 years carrying an estimated ; million tons of soil from drought-ra"aged farmland turned the sky #lood red.

.a"e for the -ntarctica desertification affects all continents. !ew deserts are growing at a rate of 20 000 s2uare miles ';1 000 s2uare kilometers( a year. 5ore than 90 percent of drylands in -frica -sia and Latin -merica that are #eing used for agricultural purposes are already e,periencing the effects of desertification. Besertification leads to famine mass star"ation and unprecedented human migration.

/o0 commodity prices >ecession *ompounds 6orld 3ood *risis -cross the nation farmers are making plans to cut their production of corn wheat rice peanuts #eef pork poultry and milk. The low prices at the end of 2000 discouraged the planting of new crops in 2009. )n Mansas for e,ample farmers seeded nine million acres the smallest planting for half a century. 6heat plantings this year are down a#out ? million acres across the 1. and

a#out 1.1 million acres in *anada. .o e"en discounting drought related losses the 1. *anada and other food producing nations are facing lower agricultural output in 2009. 3alling 5ilk Drices Mill *ows /ac' of credit - lack of credit for farmers cur#ed their a#ility to #uy seeds and fertili7ers in 2000/2009 and will limit production around the world. The effects of droughts worldwide will also #e amplified #y the smaller amount of seeds and fertili7ers used to grow crops. prices may rise #ecause a lack of credit for farmers cur#ed their a#ility to #uy seeds and fertili7ers and may limit production 1dverse 0eather conditions KunfinishedL 5iddle @ast and *entral -sia suffering worst droughts in recent history Te,as Brought *onditions %ecoming 8istoric The Te,as drought continues IIIIITorrential >ains Be"astate )ndia+s 6heat *ropIIIII an A1!-3>@-M)!-%@L)@E-%L@A 8ar"est IIIII>ains .wamp *rops -nd 6ash -way -ny 8ope Ff - Becent 8ar"estIIIII

+isaster in the ma'ing2 the 2009/10 food crisis )f you are keeping track so far we ha"e: 1( )ncreased demand 2( Becreased supply $( !o #uffer in"entory .ounds #ad like a pretty #ad situation rightN 6ell it gets worse. To Akeep e"eryone calmA and Apre"ent panicsA go"ernments are lying a#out the looming food crisis. 3 some experts and governments, in !"" #ogni$an#e o t%e a#ts, &ant !s not to #reate pani# and paint a pi#t!re o par#%ed #rops and a "ooming ood #risis. T%is, t%e' sa', &o!"d p!s% !p ood pri#es !nnat!ra""', "ead to %oarding and !"timate"' res!"t in a sit!ation &%ere man' more mi""ions a#ross t%e &or"d &o!"d go %!ngr'. 1nd 0hether it is the developing 0orld or the developed( it is those at the &ottom of the pyramid 0ho are 0

the most affected in such scenarios) T%is "eads to a #on !sing divide (et&een rea"it' and government prono!n#ements, or even (et&een t%e perspe#tives o government departments. The food crisis should have started /ast ,une -t the #eginning of last Gune concerns were mounting o"er the sharp rise in food costs. 3aced with the terri#le outlook for 2009 glo#al wheat output agricultural markets were getting fairly ner"ous a#out the tightness in food stockpiles. *hina was chewing through 1. old-crop soy#eans with month after the month of record e,ports. 8edge funds and other #ig institutional in"estors had #egun to pour money into the agricultural market helping to dri"e commodities prices higher against the weakening dollar. -gainst this #ackdrop the 1.B- #egan a campaign to suppress rallying food staples. To start off the 1.B- magically disco"ered an e,tra 11$ million #ushels of soy#ean supply within its Oresidual useP accounting column to ensure soy#ean end stocks would not slide #elow 100 million #ushels. @"en worse the 1.B- #egan releasing production estimates which were pure madness. 3or e,ample despite a )*+ drop in p"anted a#reage The 1.B- left their production estimate for -rgentina+s wheat crop unchanged at 11 55T a st!nning ,,+ %ig%er t%an "ast season-s .., MMT 'The %uenos -ires Jrain @,change -rgentine was predicting a / 55T wheat crop at the time(. The 1.B- also announced that wheat ending stocks would increase in 2009/10 and that world wheat stock to use ratios would clim# to a comforta#le 20.;pct. The media #ecame filled with #earish stories #ased on the 1.B-4s #earish propaganda: the 1. will not run out of #eans prices will ration demand *hina ha"e more than enough and will go away etc. >umors of cancelled soy#ean e,ports sales were widespread 'these cancellation ne"er happened(. To culminate e"erything on Gune $0th the 1.Bshocked the trade with estimates showing record soy#ean and near record corn plantings. .omehow the 1.B- found a million more wheat acres one and a half million more soy#ean acres -!B two million more corn acres than they had in 5archQ Ji"en the stark contrast #etween 1.B- num#ers and reality there is no way that the flawed data released last Gune was an innocent mistake. The 1.B- deli#erately mislead in"estors a#out the true state of the world+s food supplies. The 1ugust 2009 !oy&ean Crisis 6hile the 1.B- might ha"e successfully changed perceptions a#out the food supply it could not alter the reality. 6ith %ra7ilian soy#ean supplies on the open market ha"ing all #ut ran out the 1. was left as the only shop in town resulting in monstrous soy#ean sales to *hina. %y the end of -ugust grain mo"ement in the 1. came to a "irtual standstill with farmers are mostly sold out of soy#eans. Those few soy#ean end-users 'ie: feedmakers and poultry producers( were caught short and were forced to pay prices as high as they paid at the "ery height of the #ull market a year ago in 2000. !oy&ean shortage causes intense &ac'0ardation The struggle to secure 2uick-deli"ery soy#eans in the 1. cash markets sent soy#ean

futures into intense #ackwardation '#ackwardation is when cash prices are higher than future prices(. Besperate 5idwest crushers were #idding up to :2.92 a #ushel o"er *%FT .eptem#er futures contracts to ac2uire scarce soy#ean supplies. .ome processors in the heart of the 5idwest soy #elt grew so desperate for soy#eans to crush that they paid to transport some of the early har"est from the 5ississippi >i"er Belta northward to )llinois. The chart #elow shows the #ackwardation of soy#ean futures on -ugust 20. !otice the huge price gap #etween promises to .eptem#er and !o"em#er contracts. !otice the e"en larger gap #etween cash prices and .eptem#er futures.

The threat posed &y soy&ean &ac'0ardation 3utures markets are dependent on confidence in the same way as #anks. 3utures markets offer promises to deli"er commodities on specific dates 'commodity )F1s( and %ank offer deposits which promises to deli"er cash on demand 'dollar )F1s(. 3utures markets and #anks issue far more )F1s then they ha"e cash and commodities on hand to make good on these promises. 3or #oth futures markets and #anks a loss of faith in the a#ility to make good on these )F1s is fatal. 8ad the #ackwardation in soy#eans continued into .eptem#er a panic could ha"e 2uickly de"eloped spreading other agricultural commodities. 4e0 0ave of !+1 propaganda The intense #ackwardation in soy#eans did not last. )n the first week of .eptem#er the 1. launched a new attack on soy#ean markets which included: 1( 5ore insane production estimates predicting a record #reaking soy#ean crop.

5stimates for ! soy&ean production

10

-ug-11 !ep-1 !ep-. !ep-9

1.BFC!tone 7nforma 1llendale

$.199#illion #ushels .)266#illion #ushels .).82#illion #ushels .).09#illion #ushels

2( >umors that *hina was planning on unilaterally terminating FT* soy#ean deri"ati"e contracts 'ie: more rumors a#out *hina cancelling outstanding e,port sales(. $( >umors a#out a huge supply of old crop soy#eans that were going to #e dumped on the market to make way for the OrecordP 2009 corp. ?( The sale of 10?.; million #ushels of soy#ean futures to reinforce the idea that soy#ean prices were headed for collapse. ;( 8elpful news stories warning farmers a#out a imminent price collapse and suggesting they sell #efore its too late. %elow is a good e,ample of what this 1.B- propaganda looked like: :;7C5 C<//1:!5 /<<=! +espite the strength of the current mar'et( o&servers said prices could easily plunge as the =id0est soy&ean harvest finally gets rolling in late !eptem&er or early <cto&er) %arring an early free7e that could cut yields 1... farmers are e,pected to #ring in a #umper crop. The )!) +epartment of 1griculture has pro>ected )!) soy&ean production at .)199 &illion &ushels( an a""/time %ig%. Export (!'ers and #r!s%ers ma' ind t%emse"ves a&as% in so'(eans, triggering a #o""apse in t%e #as% mar0et. ?%hen it &rea's(? the eastern soymeal &ro'er said( ?it"s going to &e s0ift and violent)? The 1.B-4s scare tactics worked and pressure in the soy cash market eased as. .oy#eans trickled into grain terminals and processors in !e#raska southern )llinois and )owa as farmers sold their stocks #efore the Oprice collapseP. Fld crop sales saw net cancellations of ;0.0 T5T as #uying switched to the cheaper new crop with 1.11 55T e,port sales. @,porters #acked off their spot soy#ean #ids. *rushers decided to shut down for two weeks and wait for new-crop #eans to #e a"aila#le. .oy#eans on the *hicago %oard of Trade fell to a fi"e-month low. The conse#uence of !+1 propaganda Bespite what the 1.B- wants us to #elie"e the food situation hasn4t impro"ed. There 11

is no #umper 1. har"est #ail the world out. -sian demand for 1. soy#eans is surging. The reality of food shortages in 2009/10 remains unchanged. Fn the other hand 1.B- propaganda has succeeded in making the situation much worse. 1) %aiting for ne0 crop has created a lot of pent up demand 5any 1. processors e,tended their plant downtime maintenance in Guly due to #oth weaker profit margins and the unwillingness to out#id e,porters for spot soy#eans. -s a result 1. soy#ean consumption has plunged in the last three months as seen in the graph of monthly 1. soy#ean crush data #elow.

-ll the soy#ean crushers who shutdown production waiting for the new crop will #e crushing far more soy#eans than normal to make up for lost time which means there is a lot of pent up demand. 1n insane amount of outstanding export sales for ! soy&eans %elow is a graph of total outstanding e,port sales for 1. soy#eans going #ack ten years 'data straight from the 1.B-4s we#site(. -s of Fcto#er 1/ the 1. has already committed to e,porting 19 91/ 0/2 5etric Tons '92? million #ushels( of soy#ean from the 2009 crop. The 1nited .tates has ne"er had a #acklog of e,ports sales this si7e. )f the 1.B-4s record har"est ne"er comes in things are going to get ugly rea" fastQ

12

@"eryone is waiting for the record har"est that doesn+t e,istQ 2) /o0 prices are causing to overconsumption and underproduction !ew crop of soy#eans is already #eing rapidly consumed: early har"est from the 5ississippi >i"er Belta is #eing shipped to desperate 5idwest crushers. @"en go"ernments are #eing duped #y the 1.B- production estimates with grain e,ports pouring out of desperate 1kraine. Bespite is 20H fall in grain production cashstar"ed ukraine continues to e,port grain ahead of e"en last season+s record pace. %ecause they are unaware of the food shortage facing the world distressed sellers like 1kraine are mismanaging their grain supplies and will ha"e little grain a"aila#le for e,port during the second half of 2009/10 'when glo#al food shortage will #e at its worse(. 5eanwhile farmers are allowing millions of #ushels to rot in the rain #ecause it is too e,pensi"e to har"est and dry them at current prices. -cres of spring wheat are going unplanted #ecause .) The !+1s false estimates 0ill lead to panic !+1 estimates have 4< C;5+7*7/7T@ %elow are the latest 1.B- estimates for soy#ean production imports and e,ports. ) highlighted in red the num#ers that are worth noticing. Thousand =etric Tons Bate *reated 10/9/2009 0:??:;9 -5

1$

2006/07 Production United States Brazil Argentina China India Parag a! Canada "ther #$tal Imports China %U&27 'a(an )e*i+$ #ai,an #hailand Ind$nesia # r-e! %g!(t .$rea, S$ th "ther #$tal Exports United States Brazil Argentina Parag a! Canada "ther #$tal 87,001 59,000 48,800 15,967 7,690 5,856 3,460 9,337 237,111 28,726 15,291 4,094 3,844 2,436 1,532 1,309 1,268 1,328 1,231 8,003 69,062 30,386 23,485 9,559 4,361 1,683 1,836 71,310

2007/08 72,859 61,000 46,200 14,000 9,470 6,900 2,700 8,004 221,133 37,816 15,123 4,014 3,614 2,149 1,753 1,147 1,277 1,061 1,232 8,976 78,162 31,538 25,364 13,837 5,400 1,753 1,627 79,519

2008/09 80,749 57,000 32,000 15,500 9,100 3,900 3,300 9,090 210,639 40,700 13,000 3,450 3,100 1,830 1,500 1,200 950 1,200 1,130 7,175 75,235 34,836 29,986 5,885 2,400 1,975 1,845 76,927

2009/10 88,454 62,000 52,500 14,500 9,000 6,700 3,500 9,413 246,067 39,500 12,400 3,950 3,535 2,250 1,705 1,600 1,280 1,230 1,200 7,494 76,144 35,516 23,650 9,700 4,900 2,000 2,085 77,851

.ome of the glaring pro#lems with these estimates for 2009/10: 1( The !+1 expects the nited !tates to harvest a record &rea'ing AA)9B9 ==T C=illion =etric Tons)) 6ith soy#ean fields #uried in snow across the 5idwest this seems highly unlikely. 2( Bespite predicting that *hinese soy#ean production will drop #y 1 55T in 2009/10 'from 1;.; 55T to 1?.; 55T( the 1.B- is also predicting *hina will import 1.2 55T less 'from ?0.9 55T to $9.; 55T(. That makes a#solutely no senseQ )f *hinese

1?

demand for soy#ean is soaring 'see a#o"e( and *hinese production is down for 0hat possi&le reason 0ould the !+1 predict Chinas soy&ean imports to &e less in 2009/10D $( )ndia is suffering from the worst drought in o"er forty year yet the !+1 is expecting 7ndian soy&ean production to fall only 1E in 2009/10$ ?( The !+1 is predicting a 2E increase in soy&ean exports for 2009/10$ )n light of surging -sian demand for soy#eans and the huge amount of e,port sales outstanding predicting that the 1. will e,port only $;.; 55T of soy#eans is simply ridiculous. The 1.B-+s num#ers don+t add up. The shortages of wheat soy#ean sugar etc will soon reach the point where no a#out of spin can hide them. -s the world will reali7e there are a few a few months food supply missing faith in the 1.B- will crum#le and panic will start. Drices of "irtually all agricultural commodities will dou#le or triple 'sending the dollar into a freefall(. The 0orld is heading to0ards a complete disaster -s a result of go"ernments co"ering up a#out the looming food shortage o"er the last few months there has #een no stockpiling 'which would ha"e help ease the crisis(. 6orse with the 1.B- predicting record crops for e"erything under the sun end users were con"inced to shift demand from 2000/09 'when world had a #umper har"est( to 2009/10 'which saw a catastrophic fall in production(.

Dosted #y @ric de*ar#onnel at $:0/ -5 Belicious

Labels: Food_Crisis

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