Comments on: Ripple Effects in the Food Trade http://registan.net/index.php/2008/04/15/ripple-effects-in-the-food-trade/ All Central Asia, All The Time Fri, 25 May 2012 20:24:26 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Oldschool Boy http://registan.net/index.php/2008/04/15/ripple-effects-in-the-food-trade/comment-page-1/#comment-376815 Oldschool Boy Wed, 16 Apr 2008 16:56:24 +0000 http://www.registan.net/index.php/2008/04/15/ripple-effects-in-the-food-trade/#comment-376815 The problem with economics and its 'rules' of market economy, that it is not really a science and it does not work for everyone, and if it works it works only to the benefit of reach people. Kazakh government tries to protect its people. The bread prices in Kazakhstan is still lower than in most countries in the world. Certainly, current high wheat prices will benefit the grain traders, but the export in this case will either drive all the wheat out of the country or will raise the wheat products prices in the country before any "market mechanisms" will lower them. When there is a threat of hunger in your home, nobody will care for "free market". Nobody in the world now follows free market rules. By the way, India has banned export of rice. The problem with economics and its ‘rules’ of market economy, that it is not really a science and it does not work for everyone, and if it works it works only to the benefit of reach people.
Kazakh government tries to protect its people. The bread prices in Kazakhstan is still lower than in most countries in the world. Certainly, current high wheat prices will benefit the grain traders, but the export in this case will either drive all the wheat out of the country or will raise the wheat products prices in the country before any “market mechanisms” will lower them. When there is a threat of hunger in your home, nobody will care for “free market”.
Nobody in the world now follows free market rules. By the way, India has banned export of rice.

]]> By: Fabius Maximus http://registan.net/index.php/2008/04/15/ripple-effects-in-the-food-trade/comment-page-1/#comment-376813 Fabius Maximus Wed, 16 Apr 2008 12:40:56 +0000 http://www.registan.net/index.php/2008/04/15/ripple-effects-in-the-food-trade/#comment-376813 Great analysis. Esp nice that you mentioned the link between food prices and monetary policy. "Inflation is always and everywhere a monetary phenomenon." Milton got the Nobel for that, but seems to too complex for journalists. The other problem, which you hinted at, with export bans and direct price controls: they disrupt the economy's adaptation mechanism. Sky high prices produce more supply. Unfortunately, when inflation appears to this extent is it deeply embedded in the economy, and all solutions are painful. Politicos prefer to listen to snake oil salespeople offering easy solutions. This, of course, allows inflation to become even more deeply embedded. Astonishing that each time inflation appears it is regarded as a new thing, and these basic lessons must be learned over and over. The places that remember these lessons, like Germany, seldom get serious inflation. Great analysis. Esp nice that you mentioned the link between food prices and monetary policy. “Inflation is always and everywhere a monetary phenomenon.” Milton got the Nobel for that, but seems to too complex for journalists.

The other problem, which you hinted at, with export bans and direct price controls: they disrupt the economy’s adaptation mechanism. Sky high prices produce more supply.

Unfortunately, when inflation appears to this extent is it deeply embedded in the economy, and all solutions are painful. Politicos prefer to listen to snake oil salespeople offering easy solutions. This, of course, allows inflation to become even more deeply embedded.

Astonishing that each time inflation appears it is regarded as a new thing, and these basic lessons must be learned over and over. The places that remember these lessons, like Germany, seldom get serious inflation.

]]> By: Seyitbek http://registan.net/index.php/2008/04/15/ripple-effects-in-the-food-trade/comment-page-1/#comment-376811 Seyitbek Wed, 16 Apr 2008 06:01:23 +0000 http://www.registan.net/index.php/2008/04/15/ripple-effects-in-the-food-trade/#comment-376811 People should switch their staple from breads to rice, healthier and cheaper. People should switch their staple from breads to rice, healthier and cheaper.

]]>