The Factors Cause Rise in Agricultural Price in 2012

       The factors cause rise in agricultural price in 2012

1.0 Introduction......................................................................2

2.0 Factors cause agricultural prices to increase....................3

  2.1 Demand factors............................................................3

2.1.1 Rising incomes .....................................................3

2.1.2 Biological fuels.....................................................3

2.1.3 Speculative demand..............................................5

2.1.4 Population increase...............................................6

   2.2 Supply factors............................................................7

      2.2.1 Weather.............................................................7

      2.2.2 Policy................................................................7

      2.2.3 Input prices.......................................................8

3.0 Determine food prices in the long-run............................8  

3.1.1 Demand........................................................................8

   3.1.2 Supply....................................................................8

   3.2 The emergence of new supply and demand .............9

   3.3 The fast development of economic in developing

      Countries.................................................................10    

4.0 Conclusion....................................................................10

5.0 Reference......................................................................10  

                     Introduction

Many international agricultural prices have a big step increased since mid-2012. Among them, particularly corn,wheat and soybean were obvious. For example, figure showed that as of July 20,Chicago board of trade soybean, corn and wheat grain futures prices have surged five consecutive weeks. International maize and wheat prices were more than 2007 to 2008 during the food crisis, has risen more than 45%, the smallest increase soybean futures prices rose by nearly 25%, corn futures prices were record, the international wheat futures hit a peak in 4 years.

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Since then, the above three kinds of crop prices continue to rise. On July 30, the CBOT soybean futures jumped to a week highs, wheat futures also restart after the brief respite rally. As of August 2nd, CBOT wheat, corn and soybean prices have jumped from June 1, has reached 41%, 44% and 44%, respectively.

There were many reasons for increasing food prices, such as drought, the international capital, in short of supply and so on.

2.0 Factors cause agricultural prices to increase

2.1 Demand factors

2.1.1 Rising incomes

Food consumption per capita and total population of the world are main factors, which affect the demand for food.

Per capita consumption of grain depends on everyone's living habits and affluence. Everyone's life habits concerns religious beliefs and traditions. In the same wealth, vegetarian diet custom is conductive to reduce the per capita consumption of grain. In the same living custom, national wealth is higher, generally the more per capita consumption of grain. For example, rich people who eating meat is more, the social demand for food will follow.  The wealthy people keep pets, the more social consumption of food. Therefore, the economic development of developing countries can drive the demand for food increases. Per capita consumption of grain is also related to climate.

2.1.2 Bio fuels

Human itself is the basic demand of gradual. But this is not the major reasons in food prices in recent years. The earth policy institute, famous Lester brown, a food expert pointed out that the U.S. Government error energy policy should be responsible for the rise in food prices. The United States in order to reduce dependence on foreign oil, So it vigorously develop biological

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energy plan. According to the current technical level in The United States, one of the most common household jeep filled with a tank of gas consumed 200kg of corn, equivalent to a grow man in an African poor country's ration for a year. In 2007, the United States produced 25% of the corn into ethanol, it rose to 28% in 2008, it will reach 114 million tons. The amount of food to make ethanol was equal to U.S. In Europe. Europe and the United States' the machine of eating food is equal to the rations to 500 million people. UN officials severely criticized it. Even if the output all the food is converted into biofuels, and it only enough for 18% of the nation's car. So fuel use in food production is a "crime against humanity".