If you are finding the increases in food costs at the grocery store troubling in recent weeks, you may be in for some bad news. Oxfam, a UK charity and hunger aid group estimates that food prices could double in the next 20 years. There are a number of factors that are contributing to the price increases from biofuels displacing food production to increasingly disastrous weather events. One of the most notable and controversial factors pointed out by Oxfam is financial speculation, which continues to drive price volatility in the commodities market. For example, three companies control over 90% of the grain trade. Any period of financial downturn or market distress for these companies immediately affects grain prices. As the world population surges, sustainability in agricultural practices has come to the forefront of the conversation in debates on meeting hunger demand in the future.

Significant market risk is affecting pricing in the food supply chain across the globe. These risks are not as easily visible as a supplier side risk. Many buyers and planners do not have the time to develop a sourcing strategy which satisfies cost reduction or budget goals, satisfies servicing requirements, and includes the added step of protecting against market risks. In many smaller food manufacturers and further-processors, this risk may go unaccounted for. If commodity market volatility is affecting your supply chain, Source One can help.
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Scott Decker

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  1. OXFAM morphs into a Paul Ehrlich clone: Claims world faces mass starvation!

    Read More: http://devconsultancygroup.blogspot.com/2011/06/oxfam-morphs-into-paul-ehrlich-clone.html