TEXT OF STORY:
TESS VIGELAND: The deserts of Saudi Arabia are, of course, rich in oil, but oil won’t feed a growing population. That’s where food imports come in. The Saudis are one of the world’s top purchasers of rice, but with the prices surging and supplies shrinking, they’ve struck upon a new solution. Buy up productive agricultural land elsewhere.
From the Marketplace Sustainability Desk, Sam Eaton reports.
SAM EATON: This week, Saudi Arabia announced plans to invest in overseas fisheries, livestock and food production, and is reportedly trying to partner with Thai rice farms to lock in future supplies. Libya is in talks with Ukraine about growing wheat there, and as China tries to feed its expanding middle class, it’s looking to buy up farmland in Africa and South America. Commodities analyst Richard Feltes, with MF Global, says for decades these countries relied on cheap and abundant world surpluses to meet their food needs.
RICHARD FELTES: That is all shifting now. We’re going from “just in time delivery” to what I call “just in case reserves.”
That’s because some two dozen food rich nations, from Argentina to Vietnam, recently imposed export restrictions on staples like soybeans and rice to stem inflation at home, and that has countries like Saudi Arabia fearing the worst. Iowa State University economist, Bruce Babcock.
BRUCE BABCOCK: They are faced with the choice of either paying a very exorbitant price for a limited amount of food that’s actually traded on world markets, or they think that maybe if they secure their own supplies that they can have first call on those supplies if they own the farmland and the means of production.
That is if they can afford it. Oxfam America’s Gawain Kripke says most food-importing countries don’t have that luxury.
GAWAIN KRIPKE: And if global supply keeps getting locked up by special arrangements, they’ll have less and less food to access in global markets.
Causing even more food inflation in countries where the poorest already spend up to 75 percent of their income on daily meals.
I’m Sam Eaton for Marketplace.
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