Also see US generals planning for resource wars

Source: theage.com.au

WHILE the world has quite rightly been consumed by the issues on credit markets, an insidious problem is creeping up on us that could affect the world for decades.

There could be ongoing food shortages that go well beyond current concerns on food security, and which will result in regional unrest and conflict.

The underlying issue is highlighted in the graph, which shows that world stocks of wheat have been on a downward trend for 40 years.

This trend has continued in the past three years even though we have had two of the largest wheat crops in history during that time.

The same general trend has occurred in the coarse grains (corn, sorghum, oats, barley and triticale) and rice over the past 10 years, which means that it covers all of the key grains in the human food supply chain. This is only the surface problem — we must delve deeper to get a true picture.

The tightness in grain supply and demand has led to significant price rises over the past 18 months. This in turn has led farmers to plant more grain — and on forecasts it appears stocks will rise this year.

However, this is no reason for complacency because compared with historical demand, we have a different picture ahead that could fundamentally change the relationship between supply and demand.

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