Record rising food prices cause riots inAfrica, stoke u.s. farm economy "J'HE Rome-based United J.Nations' Food and Agriculture Organisation (FAD), said last week, that its world food-price index rose to a record in December, topping a previous all-time high set in June200B. The same record food prices causing riots in Algeria and export bans in India are allowing President Barack Obama to combine the biggest-ever U.S. farm exports with the tamest inflation since the 1960s. Globai food costs jumped 25 per cent last year to an alltime high m December, according to the United Nations. Countries probabiy spent at least $1 trillion on imports, with the poorest paying as much as 20 per cent more than in 2009, the UN says. In the U.S., the largest exporter, retail food rose 15 per cent last year and will gain as little as 2 per cent in 2011, the Department of Agriculture estimates. Governments from Beijing to boosting Belgrade are imports, limiting sales or releasing stockpiles to curb food inflation. Higher prices will push u.s. agricultural exports up 16 per cent to a record SU65 billion this year, according to a USDA forecast While US. consumers haven't been squeezed so far, grocers from Winn-Dixie Stores Inc. to - SuperValu Inc. have said they plan increases. Commodities will keep rising, according to a Bloomberg survey of more -than \00 analysts and traders. "We are absolutely s!,oiled; said Jason Britt, president of Central States Commodities Inc., a research and analysis company in Kansas City, Missouri. "We have the luxury that we spend a small per cen-
tage on food But I wouldn't be surprised to see la!:!ler bites of our Incomes used. About 19 cents of every dollar spent on food covers rawmaterial costs in the U.s., so retailers can limit increases by cutting spending on labot or marketing, said Ephraim Leibtag, a food economist at the USDA in Washington. The consumer price index rose 4.2 per cent since the end of 2007, the smallest three-year Increase since 1965, !aDour Department data show. Producer spending for processed foods rose 4.9 per cent in the U.s. last year, While consumer prices increased 1.5
per cent, Labor Department (lata show. A recoro 432 million Americans received food stamps In October. The jobless rate is running at 9.4 per cent, and Federal Reserve Chairman Ben S. Bernanke said January 7 the labor market may take five years to recover. Com advanced 52 per cent last year in Chicago, wheat jumped 47 per cent and soybeans gained 34 per cent. Cattle futures touched a record oIi January 13 in Chicago, a day after coffee reached a 13-year high in New York Rice futures jumped as much as 3.6 per cent in
Chicago yesterday. Wheat may rise as much as another 16 per cent this year, with sugar, com, soybeans, coffee and cocoa also gaining, according to the Bloomberg survey of analysts, traders and Investors in December. The farm boom Is aiding Obama's goal of doubling US. exports in five years, witli this year's shipments accounting for four per cent of the $3.14 trillion needed to meet the target US. farm income last year probably exceeded the 2004 record of $B73 billion, and cropland values gained as much as \0 per cent, accord-
Ing to Nell Harl, an agricultural economist at Iowa State University and former adviser to the governments of Ukraine and the Czech Republic. Moline, Illinois-based Deere & Co., the world's largest farmequipment maker, will report record profit of $5.47 a share this year, according to the mean of 11 analyst estimates coml?iled by Bloomberg. Earnmgs for Plymouth, Minnesota-based Mosaic Co., North America's secondlargest fertilizer producer, will more than double to $4.57 a share in the year ending in May, the mean of seven esti-
mates shows. Northfield, Illinois-based Kraft Foods Inc., the world's second-biggest food company, raised prices of Maxwell House and Yuban coffee in the U.S. three times last year. General Mills Inc., the Minneapolis-based maker of Cheerios and Lucky Charms, said in November it would increase some cereal prices. Products for supermarkets rose I.B per cent in the three months ended Sept 22, while consumer prices gained 1.6 per cent, Winn-Dixie Chief Executive Officer Peter Lynch said on a November 2 conferencecall.
German investor confidence jumps to six-month high in January rERMAN companies have Uboosted exports of machinery and vehicles fueling hiring and driving the fastest economic expansion in two decades last year. German investor confidence rose for a third month in January after the recovery in Europe's largest economy strengtnened and stocks extended gains. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict deveiopments six months in advance, increased to 15.4 from 43 in December. That's the highest in six months. Economists had expected a gain to seven, according to the median of 39 forecasts in a Bloomberg News survey. German companies have boosted exports of machinery and vehicles, fueling hiring and driving the fastest
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economic expansion in two decades last year. The benchmark DAX stock index has gained 17 per cent over the past six months. At the same time, European economies including Ireiand and Spain are cutting spending to
fight a debt crisis, hurting a recovery. "The outlook for the German economy is healthy," said Aline Schuiling, an economist at ABN Amro NV in Amsterdam. "Domestic
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that German gross domestic product would return to pre-recession levels by the end of 2011, although growth will "moderate" from the 3.6 per cent expansion last year. The deDt crisis in the euro area, which buys about 40 per cent of German exports, may restrain the economy's recovery this year. European Central Bank President JeanClaude Trichet said on January 13 that countries need to do their "utmost to meet their deficit targets" and pursue "ambitious and credible multi-year consolidation strategIes" to push down deficits. j'lt's a tug of war now between fiscal austerity measures in Europe weighing down on growth and the reacceleration of growth in said Jens Asia," Sondergaard, Chief European Economist at Nomura Bank in London. It "plays out in Germany."
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demand will be very strong this year. The only thing that will slow down is exports." The DAX has risen 2.2 per cent this year, extending its fourth-quarter gain when German companies from BASF SE, the world's largest chemical maker, to lUXUry carmaker Daimler AG reported reviving earnings. The Stoxx Europe 600 Index has risen 3 percent this year. Continental AG, Europe's second-biggest tire maker, said on January \1 that sales may rise as much as \0 per cent this year. The Hanover, Germany-based company on that day reported fullyear revenue that beat its previous forecast. The improving outlook has also fueled payrolls. The German jobless rate is currently at 7.5 per cent, the lowest since April 1992. Business confidence rose to a record high last month. Bundesbank President Axel Weber said on January 14
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