The paper "Global Food Crisis" is a perfect example of an assignment on macro and microeconomics. Considering the explanation that the global food crisis is pushed by shortages of wheat due to some cyclical factors such as random adverse weather conditions that have reduced harvests in key producing countries. Figure 1: Demand-Supply curve for Wheat These factors have put left side pressure on the supply curve (SS) of the wheat which results in a shift of supply curve of wheat to the upper left side (SS’ ). This changes the equilibrium position (E) that exists in the wheat market to a new position (E’ ).
Simultaneously, this changes the equilibrium price (P) and equilibrium quantity (Q) positions to P’ and Q’ . Eventually, this food crisis results in higher prices of wheat in the market. Figure 2: Demand-Supply curve for Rice As wheat and rice are close substitutes, when the price of wheat goes up consumers start preferring rice over wheat. This creates a huge demand for rice and puts right side pressure on the demand curve of the rice (DD), which results in the upper right side shift of the demand curve (DD’ ), which eventually again results in higher prices of rice. Answer 2: Figure 3: Year-wise consumption of rice in the world (Univ. ), 2006)(Rice consumption, 2002) The rice consumption in the world is has been growing at almost 1% annually since 1998-99.
In the initial years (1998-99, 1999-00) the production of world rice was more than its consumption. However, since the beginning of 21st century, the demand of rice has outpaced its production, and stocks of rice are coming down to unprecedented levels. This significant increase in rice consumption is led mainly by the consumption in Asian countries.
However, in recent years the demand for rice in Asian countries has grown at a lesser pace. The main reason for this consumption pattern is growth in per capita income has shifted the demand from rice to other non-vegetarian foods such as meat. However, the majority of the populations in these countries are still living below the poverty line and there is a huge amount of unmet demand which can drive the consumption of rice at new levels.
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