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Jump in Wheat Prices Confirms Insecurity

[vessob]

Jump in Wheat Prices Confirms Security Worries February 27, 2008 12:13 PM ET | Permanent Link When wheat prices hit a record high yesterday after jumping 25 percent in a single day, the economic implications were clear. But the spike also adds to the sharp concerns already expressed by U.S. intelligence agencies about the national security implications of rising food prices. Wheat prices rose 60 percent in 2007, and they have continued to climb since. In an appearance before Congress this morning, Director of National Intelligence Mike McConnell warned in his prepared statement that the record food and energy prices are "increasing the risk of social and political instability in vulnerable countries." The risks include food riots, turmoil during elections in several countries, and a drop in how much humanitarian food aid can be delivered to vulnerable populations. McConnell added that there is little relief in sight. Yesterday's one-day hike was sparked in large part by a decision by Kazakhstan, one of the world's largest wheat exporters, to charge tariffs in an effort to reduce exports. But more broadly, extreme weather has damaged crops around the world, from Australia to Canada and Europe.