Tuesday, April 22, 2008

The Face of the Global Food Crisis: Liberia

An interesting article from the BBC News discusses a change in the traditional Liberian diet, as global rice prices have soared.

Standing behind the wooden counter of his roadside restaurant, Emmanuel Biddle heaps piles of Liberian-style bolognese onto the plates of customers.

When the Liberian chef first added pasta to the menu of his traditional chop house, he didn't expect much success.

But as surging rice prices threaten to halt progress in fragile countries like Liberia, local people are changing life-long habits and switching to cheaper staple foods such as spaghetti.

Liberia imports 90% of its rice from Asia and the US.

The story reports that the price of rice has more than doubled in the last six months, making it unaffordable for many ordinary Liberians. Restaurateurs who serve jollof rice, a traditional West African dish, have been suffering.

Viola Nelson charges customers $2 for a plate of jollof rice, but she says she barely covers her own costs.

"I'm not making a profit these days. I should be raising my prices but I don't want to lose any more customers. If the food crisis gets worse I will be left with nothing," she says.

At the buzzing Old Road Market on the outskirts of Monrovia, the price of a 50 kg bag of rice has shot up to $34.

A crate (40 packets, which provides a similar amount of food to 50kg of rice) of maize or millet-based spaghetti, imported from the US, is sold for $12.

Rice vendor Augustus Geepo, perched on a pile of unsold bags, says sales have dropped dramatically as a result of the food crisis.

A year ago, he could easily sell 40 bags of rice a day. Now he is lucky if he shifts 10.

1 comment:

  1. Interesting post, Zahra.

    The more I read about the rise in food prices, the more sceptical I get about the causes that most people blame this on - India/China, biofuels, the rise in the price of oil.

    When prices, especially food prices, rise by such huge margins over such short periods of time, it usually points to speculation in the markets for these commodities. I found this article at BBC News which refers to some of these speculative activities.

    What I fear is that this current bout of inflation in food prices is not just due to speculation by local traders, as it usually has been in the past. This time around, global investors, fleeing other asset classes (stocks, mortgages etc.) may be pouring their money into food, as they have clearly done with commodities such as gold and oil.

    I was taught in college that the demand for food, especially for staples such as rice, is price inelastic i.e. an increase in price does not reduce the quantity consumed, nor does a reduction in price increase the quantity consumed.

    What could be a safer investment than food, if you could create a scarcity in supply, even if it is for a short period?