The latest food crisis news: Aid group to cut food ration to millions
In Haiti, where food riots forced a change in government last week, the next major food shipment is not expected before June, and that will not meet the need, Wolff said.
“Though we’re able to feed people, we’re not feeding people as we would like, and those people we are feeding are getting less than we would like.”
She cited two primary, interconnected causes: an increase in food prices and an increase in the need for food.
Wolff said the magnitude of the shortfall is unprecedented and predicted that the situation “probably will get worse as the year progresses.”
“What’s unique about this is that it’s happening all over the world,” she said.
Among the causes is the diversion of corn to the production of ethanol rather than food, she said.
The spiraling price of fuel has aggravated the problem by boosting the cost of fertilizer and transporting food.
Well, if high fuel prices are causing these problems, we can always ask our good friend, Saudi King Abdullah to increase oil production and bring prices down.
Saudi Arabia, the world’s biggest oil producer, has put on hold any plans to further increase long-term production capacity from its vast oil fields, its most powerful policymakers have said.
In a series of statements, including one by the king himself, the kingdom has warned consumers it does not believe there is a need for further expansion, an assumption disputed by the world’s biggest developed countries
In previous years the Saudis didn’t want the price of oil to go too high, because it would encourage consumers to look for alternatives. Since we are now looking for alternatives, and since this food crisis threatens them too, it would make sense for them to open the taps a bit.
But they’re not. The only reasonable explanation is – they can’t. It’s becoming obvious that they don’t have the kind of oil production capacity we thought they had.
Since we were basing our estimates on what our terror-supporting allies told us (and the estimates of some guy in a little office over a grocery store in Geneva), this shouldn’t be a surprise.
On April 13th, King Abdullah dropped this bombshell:
Saudi Arabia’s King Abdullah said he had ordered some new oil discoveries left untapped to preserve oil wealth in the world’s top exporter for future generations…
“When there were some new finds, I told them, ‘no, leave it in the ground, with grace from god, our children need it’,” King Abdullah said…
Saudi production capacity stands at around 11.3 million bpd, and is scheduled to rise to 12.5 million bpd next year.
The King’s remarks seem to confirm a statement made last year by Saudi oil minister Ali al-Naimi who, when asked “How high can your production go?” replied, “We’ll get to 12.5 million barrels a day and then we’ll see.”
Of this announcement, Jeffrey Rubin, chief economist, CIBC World markets says:
“A far more plausible explanation for faltering growth in Saudi production and exports is that they are rapidly approaching maximum production. Given soaring rates of internal consumption for oil, they will soon be exporting less not more crude to world oil markets.
For years, Matt Simmons has been trying to tell the world that there was a looming oil production crisis in Saudi Arabia. For years, the KSA’s friends in the State Department portrayed him as a kook.
Of Abdullah’s announcement, Simmons says:
It is a reflection that Twilight set in on the oilfields of Arabia a few years ago.”
If the Sauds and other Gulf states have maxed out, they are in a very tight spot right now. People who have been living under unpopular regimes like the ones in Haiti and Egypt are rioting, mostly about food, but also about their hated leaders. The Gulf state leaders are more beloved by our government than they are by their own people.
The Gulf states are currently experiencing a tulipmania bubble. If workers apply pressure, or if they can’t keep oil profits steady, their economies will crash sooner than later.
With their depleted resources, their massive support of terrorism, and the fact that their bubble is about to burst, even the most determined realist must acknowledge that if we continue this codependent alliance, we will be flushed down the toilet with them.
I know it’s hard, but it is time to let go.