Authoritarian governments across the world are aggressively stockpiling food as a buffer against soaring food costs which they fear may stoke popular discontent.
Commodities traders have warned they are seeing the first signs of panic buying from states concerned about the political implications of rising prices for staple crops.
However, the tactic risks simply further pushing up prices, analysts have warned, pushing a spiral of food inflation.
Governments in Asia, the Middle East and North Africa have recently made large food purchases on the open market in the wake of unrest in Tunisia which deposed president Zine al-Abidine Ben Ali.
Resentment at food shortages and high prices, as well as repression and corruption, drove the popular uprising which swept away his government.
High food prices have been a contributing factor to the recent wave of social unrest across North Africa and the Middle East. In Algeria earlier this month, young rioters chanted “Bring us sugar!” The cost of the sweetener in the wholesale market is at its highest in 30 years.
Earlier this week, Algeria bought 800,000 tonnes of wheat – much more than usual – and Saudi Arabia announced plans to double the size of its wheat stockpile.
Bangladesh and Indonesia joined the rush on Thursday, placing extraordinary on rice orders. Traders said that Jakarta, which usually buys rice in 200,000-tonne allotments, tendered for more than 800,000 tonnes. Bangladesh said it would double rice purchases this year.
All this tells me that a wide range of nations are becoming more fearful of food price inflation, and with good reason.
I have no doubt this trend towards stockpiling will grow further.
Add to that the possibility of some important worldwide climate-induced harvest failures, and we have the perfect setup for extremely dangerous food-price inflation escalations in many places.
As these three sources reveal, food stockpiling has become the big business of 2011. The essential staples of life for the people to survive are being gathered like the Old Testament story of Joseph in Egypt when he interprets Pharaoh’s dream in Genesis 41. The rest of the story is that Joseph was made overseer of Egypt and built vast storehouses. After seven years, the seven years of famine came, and the Egyptians sold everything to Pharaoh to have the grain necessary to survive.
Control the food supply, and you control the people. For despots to survive control of the people is essential.
Like ancient Rome, bread and circuses is still the modus operandi of regimes who want to control the populace. However, with the vast social media at their fingertips every moment, people are catching on to these old tricks of the power masters.
2011—the year that people decided to choose a new playbook? We shall see.
G. D. Williams © 2011