Xinhua recently reported the news that G20 is planning a conference on August 27, 2012, to discuss a potential global food crisis. The report mentioned that the U.S. drought this year covers twice the area of the 2008 drought. According to the U.S. Department of Agricultural, this year’s drought is the largest since 1956. Around 2000 counties in more than 30 states have suffered serious drought. This will have a major impact on U.S. corn exports, which represent 39% of the global trade volume in corn. In addition, the official U.S. food reserve level recorded a sharp decline. Since the United States is a large food exporter, this year’s drought may trigger a global food crisis. This has already been reflected in the Chicago futures market.
Source: Xinhua, August 19, 2012