MercoPress. South Atlantic News Agency

High meat and cereal prices for some time forecasts bank

China's preference for different types of meat and a growing demand for cereals and oilseeds have had a direct impact on the price of food world wide according to an expert from the Spanish bank BBVA, which has a strong influence and presence in Latinamerica.

"Following three decades of cheap food, particularly grains, their prices have been the last in taking off", said Joaquin Vial chief economist of the BBVA Global Tendencies Unit. More specifically droughts in several countries and China have contributed to push prices, specially grains and oil seeds (wheat, soy, corn and summer rape), while inventories keep falling year after year. Vial argued that grain demand has been closely linked not only to food but to fuels, since making ethanol (corn) and bio diesel (wheat, soy and rape) has become a great economic attraction. "Fearing shortages some countries have reacted advancing purchases of staples such is the case of Philippines with rice, while exporting countries have restricted sales to protect domestic consumers", added Vial. In this context in Latinamerica, Chile, Colombia, Bolivia, Ecuador, Paraguay, Peru and Venezuela are highly dependent on grain imports. "They are all strong exporters of fruit and commodities but not cereals", said Vial although he also pointed out that these countries are protected by opposite seasons: when Europe and United States are in winter, the southern hemisphere enjoys summer and neighbors with huge surpluses such is the case of Argentina. More specifically on China, Vial said that the country is almost self sufficient in food although availability of water could become a great problem in the future. "The continuity of great river flows much depends on Himalaya glaciers which are rapidly melting and the water is does not seem to be enough to reach the sea", besides the fact that with time as standards of living in India and China grow, demand for food and other staples will increase as well as a more sophisticated diet.