Vol. 71/No. 38      October 15, 2007

A major cause of the inflation is grain prices. Corn prices doubled in one year from early 2006, and the price of wheat has jumped 60 percent since January.

Grain is used to feed livestock, which means that meat prices are also going up. Tyson Foods, Inc., for example, raised its chicken prices three times this year.

In the United States, grocery store bills went up 8 percent the first half of 2007. According to the U.S. Bureau of Labor Statistics, food prices increased at double the rate of the previous year.

In advanced capitalist countries, food amounts to between 10 and 20 percent of household spending. In the underdeveloped nations of Asia, Africa, and Latin America, food is a far larger portion of a working-class family’s budget—making price spikes even more devastating. In India, food is on average about 46 percent of household expenses. In some of the world’s most impoverished nations, workers spend as much as 65 percent of their income on food, according to the United Nations Food and Agriculture Organization.

On September 18, hundreds of people in suburbs outside Conakry, capital of the African nation Guinea, demonstrated, threw rocks, and burned tires to protest high food prices. A 50-kilogram (.45 kilos = 1 lb.) bag of rice there sells for about 120,000 Guinean francs (about $30). A mid-level civil servant in Guinea makes about 150,000 francs a month.

In Mexico, flour prices rose 47 percent as the price of a bushel of wheat went from $4.90 in January to $8.50 in August. The baking industry now projects raising bread prices by 15 to 17 percent. Protests broke out in Mexico’s main cities last January after the price of corn flour and tortillas skyrocketed.

Basic cereal prices in Bangladesh increased by 22 percent in the first three weeks of August alone. The international price for a metric ton of high quality rice went from $260 in 2005 to $340 this year.

The price jumps have also spread to Central Asia. In Kyrgyzstan, bread prices have gone up 50 percent in the last few months. The government has revised inflation projections for this year from 5-6 percent to 9 percent.

In neighboring Uzbekistan, bread prices have jumped between 50 and 100 percent. A kilogram of meat that used to cost $3.75 now costs $6.00. According to a UN news agency, demonstrations have taken place against high prices in the Uzbek towns of Oltioriq, Andijon, Namangan, and Ferghana.  
 
 
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