Global food-riot watch Blake Hounshell Fri, 01/18/2008 - 12:21pm.
Rising prices for soyabeans and soya-based products such as tofu have Indonesians steamed:
On Monday, 10,000 Indonesians demonstrated outside the presidential palace in Jakarta after soyabean prices soared more than 50 per cent in the past month and 125 per cent over the past year, leaving huge shortages in markets.
The rapid soyflation, a result of surging Chinese demand, rising oil prices, and ethanol production in the United States, has also hit other parts of the region, such as Japan, South Korea, and Hong Kong—all wealthy places that can probably weather the storm.
KHALED DESOUKI/AFP/Getty Images
One country that is probably headed for trouble with rising food prices is not in Asia, but the Middle East. Egypt is the world's second-largest importer of wheat, another commodity that is at all-time highs right now. Egypt subsidizes wheat, flour, and bread, a policy that costs the state about $2.74 billion a year and leads to corruption and economic distortions. The government is reportedly mulling an across-the-board reduction of basic food subsidies, which in the long run would be healthy for Egypt's economy. But everyone in Egypt remembers what happened in 1977 when Anwar al-Sadat tried to cut the bread subsidy: riots in the streets. The Egyptian opposition is demoralized and defeated after more than two years of harsh government crackdowns. Widespread outrage over high prices, however, could be the spark that finally ignites popular unrest.
Which is why we can safely expect Egyptian President Hosni Mubarak, who is no dummy, to ignore U.S. President George W. Bush's latest polite request to move toward "economic openness... and democratic reform."
