October 22, 2020

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Countries Stockpiling Food Over Fears of Rising Prices

Whereas before the virus narrative took hold of the world's consciousness

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Whereas before the virus narrative took hold of the world’s consciousness businesses and governments made purchases on the basis of just-in-time inventory, now they’re making purchases on the basis of just-in-case scenarios.

According to various news sources, they’re doing so to avoid likely increases in food prices and possible long-term shortages.

As it is, already this year a closely-watched index, which measures particular farm goods futures contracts, is showing that food prices have increased since the beginning of the year, in part, because of hoarding and the perception, accurate or otherwise, of projected price increases.

A wheat field in Iran, in Online News & World News
A wheat field in Iran in 2020. Credit Photogir

Still, certain countries are more vulnerable than others, in respect of their need to stockpile food, in the event of possible food shortages and more than possible increases in food prices, observers say.

Those countries that have been amassing reserves of grain and other storable food include countries that fail to produce enough of their own supplies. Such countries are compelled to import grains and other food, even during better years.

But this year is fraught due to the virus narrative, which has resulted in the closings of businesses and the loss of jobs.

At various times, food processing centers have been closed, even when just some employees have been tested positive for the virus.

Many jobs and small businesses were lost, as days and weeks of lockdowns and quarantines turned into months, analysts say.

A recently published World Bank report shows that, since the beginning of the year, the world’s rate of poverty has increased to levels not seen in a few decades.

As a way to protect against price increases and/or shortages, a number of governments have been purchasing additional supplies of food, in order to add to their already substantial reserves.

For example, in July and August, Egypt, which, compared to other countries, is deemed the largest importer of wheat, increased its purchases of grain by almost 40 percent compared to the same time a year. ago, reports show.

According to News Sources, officials say they want Egypt to have a six month supply in reserves, especially in the event that price increases continue.

Another country that has been hedging against shortages and price increases is also in the Middle East.

Reports indicate that Jordan has been increasing its purchases of grain.

Analysts say Jordan has a supply that likely would last for a period up to a year and a half; reportedly, Jordan has 1.35 million tons in reserves. They say that it’s likely that country will continue its purchases of grain, in order to add to its already substantial reserves.

But even as the West appears to be struggling over restrictions and quarantines brought about by virus-related restrictions, China’s economy appears to be doing well, observers say.

According to a report issued by the International Monetary Fund (IMF), China will be the only major economy to recover from the depression the world was sent into as a result of government-imposed quarantines and lockdowns.

In its report, the IMF is forecasting that the world’s economy will contract by 4.4%. Although the reopening of a number of economies has caused a revision of gloomy forecasts, the downturn is still considered the worst since the Great Depression, analysts say.

More than that, officials in various countries, including those in the UK and in Germany, seem all too eager to reimpose or event strengthen restrictions and quarantines, reportedly, over news that the number of cases has increased.

Over the months, President Trump has cautioned the public that the reason the number of cases has increased is because the United States and other countries have been conducting ever more tests, thus, resulting in more cases noted.

Still, a number of observers have questioned the accuracy of many of the testing protocols, saying that a number of tests have resulted in false positives.

In any event, they say that, however accurate or inaccurate the tests, that the mortality rate is not all that different than that of a seasonal flu.

Concerning the state of the global economy, the IMF’s leading economist was quoted as saying,

“Except for China, where output is expected to exceed 2019 levels this year, output in both advanced economies and emerging market and developing economies is projected to remain below 2019 levels even next year.”

The official said that since the beginning of the year, China’s exports have increased, in part, driven by the need for medical equipment and techology that supports working remotely from home.

In the US itself, the Nasdaq has recorded gains for a number of technology-related stocks, at least those that support work-at-home arrangements.

According to analysts, China’s currency, the Yuan, is set to become the world third largest reserve currency, after the dollar and the euro.

The IMF economist said that restrictions on trade and uncertainty over the course of policies related to the virus could cause additional harm to the world’s economy.

Some public health officials say they are concerned about the number of heart attacks and strokes as well as the number of instances of neglected personal health care that are happening because of restrictions and lockdowns.

For its part, China has maintained a foreign reserve of trillions of US dollars: Over the years China has purchased trillions of dollars’ worth of US Treasury bonds.

A number of experts have said that China’s currency has been devalued, in part, in order to increase exports.

When a country’s currency is less expensive relative to other currencies, its exports are less expensive, making them more attractive, other things being equal.

At the same time, China’s level of provincial and municipal debt has been high, in large measure, caused by billions of dollars that have been spent on infrastructure.

Since the late 1970’s the West has invested hundreds of billions of dollars in China, whose labor has been paid less compared to a number of developed countries.

As well, many of China’s companies and industries are either owned by the state or are heavily subsidized by government.

Observers have pointed to China’s structural and long-term problems, where its economy is concerned.

APS Radio News & News Sources.