Saturday, February 16, 2008

Food Prices and Food Tariffs

A number of food importing countries have started to lower their import tariffs, to try to offset the impact of high international prices on their domestic consumers. And then on the other side, a number of food exporting countries are trying to make sure that more of their food stays at home and keeps prices low, so their putting on export taxes to stop their farm exporters from selling abroad, and keep them selling domestically.

...European Union just eliminated all tariffs on cereals, in an effort to stop food prices from rising so rapidly in Europe. India, for example, halved its tariffs on palm oil prices. Cooking oil is very important to a lot of people in India, so in lots of countries around the world, you're seeing very significant changes in their policies.

...the Chinese government is trying to get their farmers to keep more of their goods at home and sell it into domestic markets, and of course what that does is it makes international prices rise even more, because the normal impact of higher prices, which is to get more supply into the international market, is being offset by these domestic policies, and China isn't alone. Argentina has done exactly the same with beef exports. They've stopped beef exports, forcing Argentinean producers to sell beef in their domestic markets, and temporarily, that has kept beef prices in Argentina low, but in the long run, there is a danger that it could damage the beef industry.

-Countries alter food prices with tariffs

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