Chapter 1 Media Article
"Growing wheat scarcity may send prices skyrocketing", Business Report October 31, 2006
This article informs us of the growing scarcity of wheat in the world. The growing price of wheat will be the highest in the next six months, and threatening to spur inflation in China and India. One of the main reasons for the shortages in wheat is due to the droughts in Australia, Ukraine, and the United States. If the situation continues on, prices may jump 47 percent more to $7.50 (R56) a bushel on Chicago futures markets. Egypt, the world's biggest wheat importer, bought 180 000 tons for $34.4 million, triple what it had initially sought. A state-run grain trading company in India said it wants to buy an extra 35 000 tons after already buying 6.5 million tons this year. The world inventory would fall 43 percent by June to 119.3 million tons, the lowest since 1982. Higher wheat prices will cause economic hardship for some countries, meaning that bread and cereal prices will go up.
Relationship to chapter 1 - Resource (land), Scarcity
Since wheat is the world's most planted crop and also one of the most widely used crop, it is no surprise that the shortage will have tremendous effects. Droughts have devastating effect on the crop, but the problem with land also has a large impact as well. There is only so much land to be used for farming, and with the expansion of human population into areas with fertile soil, which contributes to the growing scarcity of wheat. Not only does limited amount of land affect the scarcity of wheat put also the ever growing population of the world. The production of wheat cannot keep up with the growing demand of wheat from the world population. As time passes, the world population may just be too overwhelming and causing the price of wheat to rise even more. The rise in wheat prices isn't necessarily a bad thing for everyone; farmers are just some people that profit from times like these. As long as they continue to produce the same amount as they do now, they will earn a higher profit with the same amount of crops. This may give farmers the motivation to produce more crops during these times to earn more profit, eventually stabilizing the supply of wheat again. What will happen one day when there isn't enough supplies of wheat for everyone? There isn't really any substitute for wheat and many people depend on wheat as part of their diet. Unless we develop new growing techniques to produce more crops on less amount of land or to manage the supply of wheat more efficiently, we will always have this problem on our hands.
This article informs us of the growing scarcity of wheat in the world. The growing price of wheat will be the highest in the next six months, and threatening to spur inflation in China and India. One of the main reasons for the shortages in wheat is due to the droughts in Australia, Ukraine, and the United States. If the situation continues on, prices may jump 47 percent more to $7.50 (R56) a bushel on Chicago futures markets. Egypt, the world's biggest wheat importer, bought 180 000 tons for $34.4 million, triple what it had initially sought. A state-run grain trading company in India said it wants to buy an extra 35 000 tons after already buying 6.5 million tons this year. The world inventory would fall 43 percent by June to 119.3 million tons, the lowest since 1982. Higher wheat prices will cause economic hardship for some countries, meaning that bread and cereal prices will go up.
Relationship to chapter 1 - Resource (land), Scarcity
Since wheat is the world's most planted crop and also one of the most widely used crop, it is no surprise that the shortage will have tremendous effects. Droughts have devastating effect on the crop, but the problem with land also has a large impact as well. There is only so much land to be used for farming, and with the expansion of human population into areas with fertile soil, which contributes to the growing scarcity of wheat. Not only does limited amount of land affect the scarcity of wheat put also the ever growing population of the world. The production of wheat cannot keep up with the growing demand of wheat from the world population. As time passes, the world population may just be too overwhelming and causing the price of wheat to rise even more. The rise in wheat prices isn't necessarily a bad thing for everyone; farmers are just some people that profit from times like these. As long as they continue to produce the same amount as they do now, they will earn a higher profit with the same amount of crops. This may give farmers the motivation to produce more crops during these times to earn more profit, eventually stabilizing the supply of wheat again. What will happen one day when there isn't enough supplies of wheat for everyone? There isn't really any substitute for wheat and many people depend on wheat as part of their diet. Unless we develop new growing techniques to produce more crops on less amount of land or to manage the supply of wheat more efficiently, we will always have this problem on our hands.
posted by J.Woo at 7:11 PM
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