http://soberlook.com/2012/07/irans-game-of-chicken-has-turned-into.html?utm_source=BP_recent
Iran, which is normally viewed as one of the wealthier third world nations because of its natural resources and a relatively large middle class (about a third of the population is now considered "middle class"), has completely mismanaged its domestic agriculture. Typically that wouldn't be a problem because exports of oil and petrochemicals would pay for food imports. But recently Iran has managed to become so isolated from the rest of the world, that it doesn't even have access to the international payment systems such as SWIFT. To get around sanctions, Iran has been arranging barter transactions that do not involve cash movements, for example exchanging fertilizer for grain with Pakistan and India. And even these deals have so far been fairly unsuccessful. Nations who are able to sell grain to Iran will either want to sell their low quality product or receive a premium for quality crops. Otherwise they can simply sell the commodity in the open market and not worry about the international sanctions impacting their relations with the West.
The food problems in Iran have gotten worse even before the spike in agricultural commodity prices. Just to put things in perspective, escalating cost of chicken for example is now becoming a major problem. Prices of chicken have more than tripled in a year.
Once in a while the government sells subsidized (discounted) chicken, creating long lines that represent the humiliation of the Iranian people.
And now if we overlay the rapidly rising global food prices on top of an already acute situation, many in Iran could be facing starvation in the near future. The drought shock that started is North America is about to make its way into the Middle East claiming Iranian people as its victim. In this global market it doesn't matter who will or will not be selling food to Iran. The fact remains that prices will spike way beyond current levels and there will be limited currency from oil sales to cover these rising costs. This is inexcusable for a nation with such tremendous natural resources. But the authorities in Tehran don't seem to be interested in addressing this danger in any serious way. Instead they are committed to ever more belligerent and irresponsible policies - blaming others for the troubles that the Iranian people are facing. And the scarce resources now available to the government are being diverted for other purposes.
http://www.guardian.co.uk/environment/2012/jul/22/americas-corn-farmers-dry-harvest
http://www.telegraph.co.uk/finance/commodities/9418651/Food-price-alert-as-US-woes-spread.html
http://www.businessinsider.com/beijing-floods-worst-rain-in-at-least-50-years-is-thought-to-have-killed-at-least-37-2012-7
and.....
http://www.guardian.co.uk/world/gallery/2012/jul/22/beijing#/?picture=393436935&index=0
Gallery of photos.... )
http://www.guardian.co.uk/world/2012/jul/22/beijing-rainfall-heaviest-china
SUNDAY, JULY 22, 2012
Iran's game of chicken has turned into the "chicken crisis"
Per yesterday's discussion on rising food prices, it will be the people of the weaker third world economies who will suffer the most from the North American drought. The probability of domestic unrest in many nations is on the rise, though not all will pose risks to global stability. Iran however is one of those countries. Because of its military capabilities and its location in the region, a destabilized Iran could be more dangerous to world economies than the problems faced by the Eurozone or China.
Iran, which is normally viewed as one of the wealthier third world nations because of its natural resources and a relatively large middle class (about a third of the population is now considered "middle class"), has completely mismanaged its domestic agriculture. Typically that wouldn't be a problem because exports of oil and petrochemicals would pay for food imports. But recently Iran has managed to become so isolated from the rest of the world, that it doesn't even have access to the international payment systems such as SWIFT. To get around sanctions, Iran has been arranging barter transactions that do not involve cash movements, for example exchanging fertilizer for grain with Pakistan and India. And even these deals have so far been fairly unsuccessful. Nations who are able to sell grain to Iran will either want to sell their low quality product or receive a premium for quality crops. Otherwise they can simply sell the commodity in the open market and not worry about the international sanctions impacting their relations with the West.
The food problems in Iran have gotten worse even before the spike in agricultural commodity prices. Just to put things in perspective, escalating cost of chicken for example is now becoming a major problem. Prices of chicken have more than tripled in a year.
Reuters: - The soaring price for a staple food that Iranians relish cooked with saffron, plums or pomegranates has become such a hot topic of public debate, and a sign of the sinking purchasing power of many Iranians, that Police Chief Esmail Ahmadi Moghaddam felt it his duty to intervene.Mehr of course promptly took that article down. But among ordinary Iranians the inability to purchase chicken has become a major topic of discussion that is turning into a simmering political issue. Covering up images of people eating chicken is not going to make the problem go away.
He urged television stations to avoid broadcasting images of people eating chicken, saying such pictures could fire up social tensions, with perhaps unforeseen consequences.
"Certain people witnessing this class gap between the rich and the poor might grab a knife and think they will get their share from the wealthy,"Mehr news agency quoted him as saying.
Reuters: - Iranian cartoonist Mana Neyestani, who lives in France, mocked Ahmadi Moghaddam's warning with a cartoon of a young man watching a pornographic film. His father tries to cover up only the image of a roast chicken in the background of the film, saying: "How many times have I told you not to watch films with chicken in them?"
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| Cartoon by Mana Neyestani |
Once in a while the government sells subsidized (discounted) chicken, creating long lines that represent the humiliation of the Iranian people.
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| Source: ایران آزاد blog |
The Guardian: - This year, however, the [Ramadan] festivity is marred byunprecedented inflation caused by a combination of governmental economic mismanagement and western sanctions. Prices of fruit and sugar, among other staples, have soared – in some cases showing threefold and fourfold increases. The price of meat has gone up to such an extent that many now eat it only on special occasions.
The latest controversy has been branded by Iranian media as the "chicken crisis". In an attempt to bring the ever-increasing price of chicken under control, the government has filled the market with subsidised chickens, prompting long queues in places where they are sold. Some require customers to show identity cards in order to stop them buying multiple times.
And now if we overlay the rapidly rising global food prices on top of an already acute situation, many in Iran could be facing starvation in the near future. The drought shock that started is North America is about to make its way into the Middle East claiming Iranian people as its victim. In this global market it doesn't matter who will or will not be selling food to Iran. The fact remains that prices will spike way beyond current levels and there will be limited currency from oil sales to cover these rising costs. This is inexcusable for a nation with such tremendous natural resources. But the authorities in Tehran don't seem to be interested in addressing this danger in any serious way. Instead they are committed to ever more belligerent and irresponsible policies - blaming others for the troubles that the Iranian people are facing. And the scarce resources now available to the government are being diverted for other purposes.FARS News: - A senior commander of the Islamic Revolution Guards Corps announced that the IRGC Navy plans to stage massive naval wargames in the near future in a bid to maintain its capability of defending the country's territorial waters.Speaking on Tuesday Lieutenant Commander of IRGC Navy Rear Admiral Javad Moshidi said the IRGC naval forces will stage wargames in the near future, and added that the necessary equipment has already been supplied for the drills.
The IRGC Navy is fully prepared to carry out the exercises and will once again display its military might to protect Iran's borders, the commander stated.
http://www.guardian.co.uk/environment/2012/jul/22/americas-corn-farmers-dry-harvest
America's corn farmers high and dry as hope withers with their harvest
Brutal mix of triple-digit temperatures and lack of rain forces farmers in the corn belt to consider abandoning entire crop
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The crop failures are set to push corn and soy bean prices upward of today's all-time high. Corn prices have risen by about 40% in the last few weeks. Photograph: Getty
The worst drought in a generation is hitting farmers across America's corn belt far harder than government projections and forcing them to a heart-breaking decision: harvest what's left of their shrivelled acres or abandon their entire crop.
For Mike Buis, pictured, who farms in west-central Indiana, the most he could hope for, his best-case scenario, was saving one-third of his crop.
"I'd be tickled to death if it would make 50 bushels (1.5 tonnes), if we don't have rain," he said. Most of his crop was a write-off, and Buis was already looking ahead to next year.
"Some stuff technically is not going to be worth the combine bill to harvest it," he said. "This is my 49th crop, and I have never had a year like this."
Such individual calculations are replicated thousands of times across the 1,336 counties – about a third of the country – that are now officially a disaster zone, because of a brutal combination of triple-digit (40C) temperatures and prolonged drought. Scientists see both as evidence of climate change.
Buis has seen no rain on his 3,200 acres (1,300 hectares) since 28 May. Some stalks are chin-high – but with no ears of corn. Others are as squat as pineapple fronds. Soy bean that should be spread out at knee-level barely graze the shin.
The additional crop failures are set to push corn and soy bean prices upward of today's all-time high. Corn prices have risen by about 40% in the last few weeks, soybeans by about 25%.
That, in time, will mean higher prices for milk, poultry and meat for American consumers, and misery – possibly chaos and unrest – in African and Latin American countries, which depend on imported grains,food security experts say.
The US government warned this week that a third of the corn and soybean crop in drought-stricken areas was in poor condition.
But in Indiana, at the centre of the drought, they say the true extent of the crop losses will be far higher.
"Everybody that has walked their fields knows it's going to be worse than what they thought. That's just a universal across-the-board deal," said Norv Gottula, who owns the Cloverdale Agri Centre grain dealership.
"We've had droughts like this in '83 and in '88, but this here is more severe and it's going to be more wide reaching than before. One, because I think the actual crop loss and devastation is going to be worse, and two, because there is so much more money involved in putting up a crop," he said.
Farmers and local businesses in Cloverdale are already cutting back. One of Gottula's customers slaughtered her goats, rather than pay the extra cost to feed them. Livestock farmers are killing hogs and cattle, because they can't afford the higher-priced corn to raise them. The local ethanol plant has halted production, as have other plants across the midwest making fuel from corn and soy beans. The local horse rescue shelter took in three extra animals, because their owners can't feed them.
Sales of tractors and other farm machinery are down by 70%, said Dave Dorsett of Reynolds farm equipment in Martinville. "As soon as this drought hit, it has taken a drastic fall from lawn mowers all the way through the ag equipment," he said.
"We've even had guys putting the money down and letting the money go just so they can get out of their contracts."
Similar shockwaves are spreading throughout other rural communities, said Ernie Goss, an economics professor at Omaha's Creighton University, and who conducts a regular survey of rural communities in 10 midwestern states. Nearly a third of bank managers said farmers' borrowing was up, Goss found. Two-thirds said ethanol and biodiesel plants were cutting back or shutting down completely, and consumer confidence had fallen sharply even in farm communities that have so far been relatively recession proof.
"There has been quite a lot of boasting that unemployment is at less than half the national numbers in Nebraska, Iowa, North Dakota, South Dakota – a lot of that is traced to farming," Goss said. "In some parts of the region it could be some of the toughest times since the 1980s."
And this is just the beginning. Most analysts expect the real food price shock to hit late this winter or early next year – and warn that it will be far worse than the government's current estimates.
The worst is yet to come
Some analysts, such as the Earth Policy Institute's Lester Brown, say the US department of agriculture has underestimated the shortfall in the corn and soy bean harvest.
Brown says he expects this year's harvest to drop by 96m tonnes – about double the official estimate.
Meteorological forecasters, such as Accuweather, have also warned corn yields will be much lower than the USDA projections.
Farmers in areas of severe drought, like this stretch of Indiana, are also pessimistic. "We have had crop insurance guys in our area seeing from 10 bushels an acre to 30 bushels an acre (130kg/hectare), and those are 200 bushel an acre farms," said Dorsett.
Department of agriculture officials say America will still produce a reasonable corn crop – farmers planted more than 96m acres of corn this year, the most in 75 years. Some of those acres are in areas that are not affected by drought, the officials say.
But almost everybody agrees: the worst is yet to come, especially for those countries struggling to pay world prices for corn and soybeans. Along with prices for milk and meat, due to rise because of the increased costs of animal feed, consumers can expect price rises for processed foods that use corn and soy.
American consumers, however, are unlikely to feel the pain as deeply as those in poor countries.
"The poorest countries bidding for grain are very sensitive," said Sophia Murphy of the Institute for Agriculture and Trade Policy. "They have no reserves of currency to pay more or bid higher when prices go up."
Low income people in the developing world also spend a bigger share of their income on food, making them more vulnerable to price shocks, as during the 2008 food crisis.
"The low income countries, wherever they are in the world, consumers spend larest fraction of their income on food: sub-Saharan African, parts of which have corn or maize as their staple, South America from mexico south," said Robert Thompson, a food security expert at the Chicago Council on Global Affairs.
'It's a guessing game'
In the corn belt, however, they are already looking to next year. Do they roll the dice again on corn? David Rhea, Buis's cousin, stands to lose a considerable amount on this year's failed harvest because he does not have full insurance coverage.
To his mind, this drought properly started last year, when July brought blast-furnace temperatures. Winter brought very little snow or rain. Then came June's heatwave, earlier than last year's run of triple-digit days, and of even longer duration.
Is it evidence of climate change? "I'd have to ask Al Gore," Rhea joked.
But the question is growing impossible to ignore, even in strongly Republican parts of rural Indiana. Another year or two like this one and farmers are going to have to change their practices, Buis said.
"I think it is a historic shift," said Dorsett. "There is not question that that is shifting, based on climate, based on conditions, based on crops. We have had 70 or 80 degree (21-27C) weather at the end of February and in March. That is what you have in Arizona."
But he's less clear on how farmers should respond. "It's very unstable. It's a guessing game. Do we go ahead and come back and plant? Do we just go with the same old planting techniques we've done for the last 50 years and roll the diece again, or do we try to beat Mother Nature," he said. "It's a tough one."
and......
9:00PM BST 22 Jul 2012
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Scorching temperatures and extreme dryness are devastating harvests across farmland in the Midwest. More than three quarters of the US's growing space is now affected by the harsh weather conditions, according to official data.
With crops dying in the fields, the prospect of tightening supplies is driving what Barclays Capital analysts say is one of the most rapid prices spikes "in recent memory".
US corn and wheat futures contracts have both risen by a third since mid-June, the biggest four-week price gain in US grains futures seen more than a quarter of a century. On Thursday, US corn for September delivery set a record high of over $8.16 a bushel, while soybeans for August delivery also hit a record at $17.49.
The global nature of markets means that the reverberations from the US, the world's biggest corn producer as well as a major supplier of soybeans and wheat, will be felt around the world.
Alan Clarke, an economist at Scotia Capital, expects the effects of the drought to add "significantly" to UK inflation over the start of 2013, since it takes around six months before rises in agricultural commodity prices feed into prices on the supermarket shelves.
http://www.businessinsider.com/beijing-floods-worst-rain-in-at-least-50-years-is-thought-to-have-killed-at-least-37-2012-7
37 Reported Dead After Flooding In Beijing, But Some Worry Real Number Might Be Higher
At least 37 people are thought to have died in widespread flooding in Beijing over the weekend, the Global Times reports.
Officially the flooding is being blamed on the worst rains to hit Beijing in 50 years (another amazing, yet perhaps suspect figure says that the rain was the worst to hit the Fangshan district of Beijing in 500 years).
Citizens of Beijing aren't just blaming the weather however, and are instead using microblog services to criticize the city's underdeveloped sewer system.
Bill Bishop of the Sinoism blog suspects that the official number of 37 may be low, given the destruction seen in Fangshan district the video below from CCTV:
"Fangshan is a stark reminder of the close proximity of the first and third worlds in China, and given the topology, the deforestation and the poor infrastructure in parts of Fangshan things could really be quite bad there."
The footage also shows a 1 km long flooded stretch of the Jinggang highway completely submerged, with some reports that up to 100 cars may be in the water.
and.....
http://www.guardian.co.uk/world/gallery/2012/jul/22/beijing#/?picture=393436935&index=0
Gallery of photos.... )
http://www.guardian.co.uk/world/2012/jul/22/beijing-rainfall-heaviest-china
Beijing's heaviest rainfall in 60 years kills 10
Rainfall causing widespread chaos in the Chinese capital, stranding 80,000 people at the city's main airport
Rescuers and residents stand next to a stranded car being pulled up from a flooded street under the Guangqumen overpass in Beijing. Photograph: Joe Chan/REUTERS
The heaviest rain storm in six decades to hit Beijing killed at least 10 people and caused widespread chaos, flooding streets and stranding 80,000 people at the city's main airport, state media reported on Sunday.
The storm, which started on Saturday afternoon and continued late into the night, flooded major roads and sent torrents of water tumbling down steps into underpasses.
In the suburb of Tongzhou, two people died in a roof collapse and another person killed was struck by lightning, the official Xinhua news agency reported.
Other deaths were caused by electric shocks from downed power lines and drowning, it added.
More than 500 flights were cancelled at the Chinese capital's international airport, the Beijing News said.
However, the subway system was largely unaffected, aside from being swamped with people desperate to get home and unable to use cars, buses or taxis.
The city received about 170mm (6.7in) of rain on average, though a township in Fangshan district was hit by 460mm (18.1in), Xinhua said.
The Beijing city government said on its website it was working to get the metropolis back on its feet, but reminded people to prepare for further bad weather.
"The weather forecasters say that from late July to early September this city is prone to flooding, and there could be further large-scale storms or extreme weather," it said.
Many residents took to China's popular microblogging site Sina Weibo to post dramatic pictures of the storm. Some complained the city should have been prepared, especially since the government had issued a severe storm warning the day before.
"It was forecast early on that Beijing would get torrential rain, so why were pumps and other facilities not prepared in time?" complained one user.
But at least one good result came from the storm. The official pollution index, which had showed an unhealthy rating before the storm hit, registered "excellent" on Sunday, with the air noticeably free of its normal acrid smell.
