The effects are being exacerbated by churlish weather in other parts of the world – notably in the big wheat-producing areas of Russia, Ukraine, and other countries that hug the Black Sea, where a more moderate drought has hit, as well as in Australia, the globe's No. 2 wheat exporter, where below-average rainfall is expected to reduce the November harvest by more than 10 percent.
As the impact of the droughts works through the global food system, an urgent question looms: How hard are people being squeezed – and will it lead to possible social unrest?
This is no idle consideration. The world has been at this point before, as recently as 2008. At the time, global food prices were soaring, emergency stockpiles were depleted, and, with drought on two continents, little relief seemed in sight.
From Russia, to Panama, to the Philippines, almost everywhere really, governments did precisely the wrong thing. They panicked, rushing into grain markets to stockpile supplies or banning exports. Speculators poured in after them, like lions harassing a herd of antelope, raising prices even further beyond the rational laws of supply and demand.
What followed were bread riots across the developing world from Haiti in the west, through Egypt and Cameroon, and on east to Pakistan and Bangladesh – nearly 30 countries in all. The food crisis of 2008, and a smaller price spike in 2010, also set the stage for the Arab uprisings of 2011 that are still remaking the politics of the Middle East.