Industrialisation of China threatens global food supply

[Chris Coles]

Global grain markets are facing breaking point because of drought and mass urbanisation in China which is diverting land-use away from crops, according to a new study from researchers at the University of Leeds.


The study exposes the fragility of the global grain supply and states that if China’s recent urbanisation trends continue, and the country imported just five per cent more of its grain due to a shortfall, the entire world’s grain export would be “swallowed whole”.


By Sarah Hills, 27-Jan-2009

http://www.foodnavigator.com/Financi...etter%2BWeekly

[ProdigyofZen]

Re: Industrialisation of China threatens global food supply

sweeettttttt time to buy grains baby!

[GRG55]

Re: Industrialisation of China threatens global food supply

Global grain markets are facing breaking point because of drought and mass urbanisation in China which is diverting land-use away from crops, according to a new study from researchers at the University of Leeds.


The study exposes the fragility of the global grain supply and states that if China’s recent urbanisation trends continue, and the country imported just five per cent more of its grain due to a shortfall, the entire world’s grain export would be “swallowed whole”.


By Sarah Hills, 27-Jan-2009

http://www.foodnavigator.com/Financi...etter%2BWeekly

Thanks for the post and link Chris. This whole situation deserves close watching. Here's a few things, beyond China, I keep seeing pop up on the radar:

• Will a secular global warming trend brings ever increasing drought to growing regions?;
• Alternatively, are we in a cyclical cooling trend coincident with lack of sunspots, la Nina, Pacific Decadal Ocsillation effects, that brings several years of cold, wet springs that severely delay planting and shorten growing seasons in the Northern Hemisphere/North America Great Plains?;
• Global fertilizer consumption has declined measurably [Agrium & Potash Corp reports], so can declining crop yields be far behind?;
• The global agriculture industry is subject to the same credit market fallout as other sectors, and the picture ain't pretty;

so once reflation takes hold and the US Dollar starts to roll over, are grains and other foods going to be one of the first areas of upward price stress? History suggests that food and energy prices lead every great inflation.

[we_are_toast]

Re: Industrialisation of China threatens global food supply

The numbers in the article seem a bit odd.

World grain production = 1800M tonnes.
China production = 500M tonnes.
5% of China production = 25M tonnes.
% of world production = 25/1800 = 1.3%

Doesn't sound too catastrophic, especially since the U.S. used approx 60M tonnes for ethanol production.

Will a secular global warming trend brings ever increasing drought to growing regions?;

Increased energy in the atmosphere and oceans might lead to more extreme events, periods of drought followed by periods of flooding. Or as in the midwest, several years of very mild winters followed by a couple of very harsh winters, but few normal years.

Alternatively, are we in a cyclical cooling trend coincident with lack of sunspots, la Nina, Pacific Decadal Ocsillation effects

Not enough data for the sunspots. My guess would be more El Ninio, or maybe even a breakdown of the southern oscillation. Not good either way.

Global fertilizer consumption has declined measurably [Agrium & Potash Corp reports], so can declining crop yields be far behind?

How about the availability of oil based ag chemicals? As supplies get disrupted, could this be a real problem for the next year or two?

The global agriculture industry is subject to the same credit market fallout as other sectors, and the picture ain't pretty;

This seems like the big immediate problem. I like playing in traffic so I'm thinking an Ag crop ETF might be a good play until harvest time.

[raja]

Re: Industrialisation of China threatens global food supply

Increased energy in the atmosphere and oceans might lead to more extreme events, periods of drought followed by periods of flooding. Or as in the midwest, several years of very mild winters followed by a couple of very harsh winters, but few normal years.
Not enough data for the sunspots. My guess would be more El Ninio, or maybe even a breakdown of the southern oscillation. Not good either way.
How about the availability of oil based ag chemicals? As supplies get disrupted, could this be a real problem for the next year or two?
This seems like the big immediate problem. I like playing in traffic so I'm thinking an Ag crop ETF might be a good play until harvest time.

I was thinking that Ag ETFs might be good now . . . but deeper reflection has led me to wait.

In a global depression, people will turn down their house heat, consolidate their driving, go to restaurants less, buy less stuff. So commodities in general will continue down IMO. But, I thought, people will still need to eat, so maybe investing in agricultural commodities would be good.

Then I realized that people may eat the same amount, but they will waste less, and therefore buy less.

First, they will not go to restaurants as frequently . . . and restaurants waste a lot of food. Second, they will be more careful with what they throw out at home. Leftovers will be reused.

For Americans, global depression might mean less food wasted, but in the poorer countries, the people may actually eat less . . . or starve :eek:. Also, there will be less consumption of expensive animal foods worldwide, which requires many more resources for production than grains and beans.

Of course, changing weather patterns and diminishing oil supplies could decrease food supply, but maybe these would only offset the demand destruction, so you'd be stuck with an investment going nowhere for years.

So, that's why I'm holding off on Ag . . . for now.
When the real recovery comes, that will be the time . . . .

[BadJuju]

Re: Industrialisation of China threatens global food supply

"Flood-Resistant Rice Being Bred"

http://www.cnn.com/2009/TECH/science...ice/index.html

It should offer a significant boost to world-grain production.

[politicalfootballfan]

Re: Industrialisation of China threatens global food supply

----nm----