There are many reasons for this sharp increase in the prices of food especially and a valid economic justification may not be provided to accurately outline the factors behind the increase in the food prices.
Development of alternative fuel i.e. bio-diesel, low crop yields due to bad weather in major commodity producing countries as well as the higher demand from developed as well as emerging countries, all resulted into food inflation. Besides, the recession in US economy, one of the largest importers of commodities, is also cited as one of the major reasons behind the sharp increase in the food prices as there has been substantial crises being faced by US economy over the period of almost two years.
The increase in food prices can be traced back to last two years as FAO food Index rose by 9% in 2006 and 23% in 2007. (IFAD, 2008). This sharp increase suggests that there is a great increase in the prices of food items all over the world and many important factors are at play which is pushing the prices up. In order to make an economic analysis of this increase, we will outline and discuss different factors causing the prices to go up. (The World Bank, 2008)
There is a general increase in the concern being shown over the impact of greenhouse gases over the environment of the world. ...