Saturday, November 15, 2008

UN cuts food aid, as widespread starvation takes hold

By Alex Bell
As millions of Zimbabweans fight a daily battle against hunger, malnutrition and disease, and as the need for humanitarian assistance daily grows, the United Nations World Food Programme (WFP) said this week it has been forced to cut its life-saving food rations.
The UN has predicted that up to 5 million people will face starvation as soon as January, because of widespread food shortages and the devastating effect of the crash of the local currency. The government, in a shocking act of cruelty, only partially lifted a ban on crucial foreign aid recently and the trickle of food aid that has returned to the country means countless numbers of men, women and children have already died from lack of food. The true number of deaths may never be known.
The food crisis is affecting all sectors of life, and even boarding schools across the country have been forced to shut their doors early because there is no food to give students. Schools were scheduled to shut down for the festive season in early December but authorities at some boarding schools last Friday ordered all Form one, two, three and five students out of school, citing the overwhelming food crisis. Only students writing their ‘O’ and ‘A’ level examinations have remained, but it unclear what they are being fed, if they are being fed at all.
The lives of countless more people now hang in the balance after the WFP announced on Tuesday that it is facing a serious funding crisis and it has already been forced to reduce its aid.
“WFP still requires US$140 million to fund its operations in Zimbabwe until the end of March 2009 - with a shortfall of approximately 145,000 tons of food, including 110,000 metric tons of cereals and 35,000 metric tons of other food commodities,” the agency said in an update detailing its first month of large-scale distributions in October.
A WFP spokesman, Richard Lee explained on Wednesday that there is “currently no food in the pipeline for distributions in January and February”, a period when the food crisis is set to reach its peak and when almost half the population will need urgent food assistance. The WFP said it aims in November to distribute around 46,000 tons of food to more than 3.3 million people under the “vulnerable group” feeding programme and around 600,000 under the safety net programmes, but the organisation said it will not be able to provide every beneficiary with a full food basket. The November cereal ration has been cut from 12 kilograms to 10 kilograms per person per month and the pulse ration from 1.8 kilograms to one kilogram for all “vulnerable group” beneficiaries and for people receiving take-home rations under the safety net programmes.
“These cuts will allow WFP to stretch its available resources as far as possible but they will leave greater numbers more malnourished and more susceptible to disease,” Lee explained, saying the group is very concerned by the numbers that will be left hungry. He added that the group is confident it can “reach and provide aid for the predicted numbers of Zimbabweans next year” but said this will depend of receiving sufficient donations to make up the current shortfall.

Worst of Food Crisis Approaching: Going Long In The Midst of Panic Selling

The wave of selling fear and forced liquidation has sent grain prices along with everything else plunging to impressive lows. Grains prices as measured by the DJ-AIG sub index are now over 50% off their highs from just a few months ago. At this time most investors are running for the streets in panic calling for all markets to return to prices not seen since the ice age. However, those investors who have the nerve to position themselves over the next couple of months will probably be handsomely rewarded over the next couple of years. It is often said that if you hear a lie enough times, you will eventually believe it. If you watch “Bubble Vision,” everyday you will hear the term “Global Demand Destruction!” People are returning to pre-historic times and will soon live in caves again. They will no longer drive, fly, eat, heat their homes, and use electricity. They are primarily focused on demand here in the United States, and continue to ignore the 685 billion people on the other side of the planet. They fail to realize that demand is merely slowing at a time when production and inventories of most commodities are falling off a cliff. You will continue to hear that the Federal Reserve can bail out institution after institution. They can print trillions and trillions of dollars and they can do all of this without impacting the credit worthiness of the U.S. government and value of the U.S. Dollar. Thanks to the global credit crisis, farmers around the world are having trouble getting the credit they need for next year’s crop. They do not have the financing they need to for the land, fuel, equipment, fertilizer and labor. Furthermore, input costs are still relatively high. Farmers need grain prices to come up just to break even. Marino Colpo, a large soybean producer in Brazil said that they require at least $10.50 soybeans to break even. He also said that production in Brazil is likely to drop this coming season because farmers are unwilling to plant at a loss. Thanks to the plunging grain prices induced by the credit crisis, we will see farmers around the world cutting back on production. This is at a time when global grain inventories are already near historic lows. William Doyle, president of Potash says that even with slowing demand growth they will need to produce record crops just to maintain adequate stocks.Global grain inventories will get tighter as farmers are unable and unwilling to produce grains at a loss. This could eventually send grain prices higher and switch the attention of the mainstream media from the credit crisis to the food crisis and famine. Feel free to contact me for information and research to help you invest in commodity futures and options including the grain markets. I can be reached at 1-877-377-7936 or you can email me at .