by wisconsin_cur » Mon 26 Jan 2009, 05:41:05
BBC$this->bbcode_second_pass_quote('', 'A')lthough prices have fallen from the highs recorded during the unprecedented spike at the beginning of 2008, they have not fallen back to where they had been before the crisis began. And many of the factors that contributed to the rise then are still driving prices up.
These include competition with biofuels for scarce land, worsening agricultural productivity, the increasing proportion of people living in cities, and the effects of climate change threatening harvests.
...
$this->bbcode_second_pass_quote('', 'A')s the ripples spread out from the banking sector in the richest countries in the world, the waves are hitting those least able to cope - in the poorest countries. There is less money to invest in new businesses, and as well as a cut in foreign direct investment, the global economic slowdown means that money sent home by those working abroad has gone down.
In a country like Kenya, where locally prices have continued to rise, the effect is being felt hard. According to the World Bank, the volume of world trade is likely to contract for the first time since 1982, further reducing the potential for growth in developing countries.
The collapse in commodity prices has taken the pressure off food price rises, but has also given new problems to some developing countries that depend on commodities, like Zambia, with its reliance on copper.