The quick rise in food inflation started around seven months ago, Colas pointed out, building off long-term trends like the growing middle class in China and India, where demand for beef and vegetable-based proteins grew disproportionately to demand for grain-based diets. Converting soft commodities like corn and wheat into protein -- think cows and poultry -- is inefficient, costly and time-consuming.
Food inflation in China is roughly 9.6% and in India, 18%, CNNMoney reported.
Rising food prices signal that producers should produce more, Colas said, but "you can't just turn a switch." It takes time to plant the corn, it must be the right time of year, and it takes time for the crop to grow.
Increased demand for biofuels like ethanol and ethanol sugar also eat up capacity, Roberts added. Commodity speculation drives prices even higher in the futures markets. "One reinforces the other," he said.-- Written by Miriam Marcus Reimer in New York.
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