Questions are many but can be seen in different perspectives at the same time on international level
It is a combination. We have had stocks of many of the basic commodities continue to get lower and lower over time, and therefore, if you then have some external event, like the weather problems we have had across Russia, Ukraine, North America, China, some in South America, you don't have much cushion.
Now, at the same time, there is a demand change going on, and that is that with the higher incomes in developing countries and changing diets, we are seeing an increased pattern. People will eat more meat products, for example, that will use more grain. This is a good thing over the long term in terms of nutrition, so I am not by any means suggesting that the improved diets in the developing world are the source of the problem, but it means that it takes longer to rebuild the stocks when you get a supply response.
So one of the points that we are trying to emphasize through these meetings is the need for the G20 and for the World Bank and others to put food first, because I think we are in a particular moment of vulnerability in that if you have some other events, which you can never predict, we really don't have a cushion.
Now, another problem is the connection with fuel prices. So, as you see fuel prices go up, driven in part by events in the Middle East and North Africa, the linkage between food and fuel is much tighter than it was 10 years ago. Some of this is biofuels, but part of it is related to fertilizers and the inputs for energy, and part of it is also connected to general money moving in and out of commodity markets, and that is linked to other issues including where investors will put their funds if they are concerned about inflationary aspects.
So you have a whole series of interacting items here, but the reason I emphasized this in my opening statement is that on the one hand, we can make this into an advantage with production and productivity and expanding the supply in the developing world, but in the near term, I think there are some very practical steps that can be taken to help avoid some of the problems of volatility, and I would like to push the system to take them over the next months.
