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Sorry, I have to post another
article about food prices. Last week I
posted about America's drought and how it is affecting the the price of corn in South Africa. Now I want to tell you about
soybeans in China:
America is the largest producer
of corn and soybeans. This year, a
historic drought devastated America’s harvest.
Accordingly, the price of corn and soybeans is soaring.
Soybeans are pressed to create
cooking oil. The Chinese consume a lot
of cooking oil because they fry most of their food. As a result, China buys more of America’s
soybean crop than any other country.
In the coming months, the higher
price of soybeans will likely drive the price of cooking oil higher. This will affect China’s poor
disproportionately because China’s poor spend a high percentage of their income
on food.
China’s government is scrambling
to prevent this price increase because rising food prices fuels social
discontent. They are warning their
biggest oil producers to keep prices in check and are tapping into government
reserves of food.
Bottom line: Weather in Iowa
directly affects the Chinese government’s ability control discontent among its
citizens.
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