The ongoing “Arab Spring” in the energy-rich Middle East has been fueled by rising food prices and economic stagnation – two factors that continue to play a major part in political developments in that part of the world. High and rising food prices led to the 2007-8 food crisis sparking riots, export restrictions, and instability – not something which would benefit the global economy or the global energy markets.
Food prices have moderated over the last year but a major new threat has arisen. Weather patterns suggest a serious drought in the U.S. Midwest could occur this year – with a Purdue agronomist noting this could develop into one of “the so-called great droughts we’ve had in the last 30 years.” Because the U.S. is the world’s largest exporter of corn, soybeans, and wheat the impact could spread to global commodity prices very quickly. Read More