Tuesday, April 29, 2008
Thursday, April 24, 2008
With supplies dwindling and customers hoarding stocks, the US giant Wal-Mart and British stores are starting to restrict sales
Wal-Mart has said that its wholesale business had limited each customer to four bags of long-grain white rice per visit because of a shortage in supplies
Suzy Jagger in New York and David Charter in Brussels
British shopkeepers and the US retailer Wal-Mart have rationed rice sales to protect dwindling supplies.
The move by the world's biggest retailer, which owns Asda, constitutes the first time that food rationing has been introduced in the US. While Americans suffered some rationing during the Second World War for items such as petrol, light bulbs and stockings, they have never had to limit consumption of a key food item.
In Britain rice is being rationed by shopkeepers in Asian neighbourhoods to prevent hoarding. Tilda, the biggest importer of basmati rice, said that its buyers — who sell to the curry and Chinese restaurant trade as well as to families — were restricting customers to two bags per person. "It is happening in the cash-and-carries," said Jonathan Calland, a company executive. "I heard from our sales force that one lady went into a cash-and-carry and tried to buy eight 20kg bags."
Wal-Mart said that Sam's Club, its wholesale business, which sells food to restaurants and other retailers, had limited each customer to four bags of long-grain white rice per visit. In the past three months wholesalers have experienced a sharp rise in demand for food items such as wheat, rice and milk as businesses stocked up to protect themselves against rising prices.
Global rice prices have more than doubled in the past year partly because countries such as China and India — whose economies are booming — are buying more food from abroad. At the same time, key rice producers banned exports of rice to ensure that their own people could continue to afford to buy the staple: India, China, Vietnam and Egypt have all blocked exports and so demand for rice from countries such as the United States has increased.
Costco Wholesale, the largest warehouse operator in America, said this week that demand for rice and flour had risen, with customers panicking about shortages and hoarded produce.
Tim Johnson, of the California Rice Commission, said: "This is unprecedented. Americans — particularly in states such as California — have on occasion walked into a supermarket after a natural disaster and seen that the shelves are less full than usual, but we have never experienced this."
Food prices across the world have rocketed in the past two years, driven by increased demand for corn — the grain that is fermented to produce ethanol, the biofuel. With corn a main foodstock in dairy farming, milk has doubled in price in two years.
Growing awareness of global food shortages have exposed a deep divide in Europe over how best to guarantee supplies.
Germany joined France yesterday in demanding that the European Union maintain huge subsidies paid to farmers. The EU pays €42 billion (£34 billion) a year to farmers through the Common Agricultural Policy (CAP). Britain has called for its removal, claiming that it distorts the food market at vast expense to taxpayers. Berlin argued that the global food scare showed the need for subsidies to continue beyond 2013, when reforming nations, led by Britain, want to scrap payments that prop up unviable farms.
In a further assault on Britain's policy of liberalisation, German ministers also backed French opposition to Peter Mandelson's direction of world trade talks. The Trade Commissioner is offering cuts in EU farm subsidies to trigger concessions from other trading blocs, but Paris and Berlin believe that he has gone too far in chasing a global deal at a time of protectionist pressures.
Under a concession won in 2005 by Tony Blair in exchange for a cut in Britain's EU rebate, an EU budget review will begin this year. Farm payments in the form of the CAP budget and the ¤10 billion rural development budget are up for debate.
Germany said that a rush to cut subsidies could leave the EU unable to feed itself. "We have to make sure that we can provide this continent with food sustainability and make sure that we produce enough to combat poverty in the developing world," Horst Seehofer, the German Agriculture Minister, said.
President Sarkozy of France has pledged to reform the CAP but has yet to give details and is under immense pressure from farmers to continue their handouts. Mr Seehofer added: "In the future we will have food conflicts . . . and we have to make sure that the population here is fed at prices that are affordable. Food security is a demand of our population."
British diplomats in Brussels dismissed the food security argument. "You cannot spend 45 per cent of the EU budget on 5 per cent of the population who produce 3 per cent of the EU's output," one said.
THE GLOBAL FOOD CRISIS
It is mid-morning and the car park of the Aldi supermarket in Melksham, Wiltshire, is almost full. The German chain is benefiting from increases in food prices, welcoming customers who previously shopped at Sainsbury's or Somerfield.
Paul and Tracy Jones are new faces at Aldi, having driven six miles from their home in Corsham. They have a monthly food budget of £400 for themselves and their three children. Paul said: "We have definitely noticed the increase in food prices. Everything has gone up, even here. We are paying 30p to 40p more for a chicken than we were a year ago."
Lake Naivasha camp, Kenya
Virginia Ndungu, a 55-year-old mother of eight, watches her daughter stir a blackened pot of cornmeal gruel in front of a tent in a refugee camp where they have lived since January (Nick Wadhams writes). This is tonight's meal, and there will be no bread, no meat, and no tea.
Camps like this are the front line in the global crunch over rising food prices. "I have nothing, not even ten cents – how can I afford sugar for porridge," said Ms Ndungu, who farmed chickens but was displaced during Kenya's postelection violence.
Like hundreds of shoppers who crowd into Guara market on the outskirts of Brazil's capital, Brasilia, Antonia da Souza complained about the startling increases in the cost of food (Gabriella Gamini writes). "The price of rice has doubled, bread too. Tomatoes have tripled and black beans are 30 per cent more expensive," she said. "I would have to spend three times as much I used to six months ago to get my weekly shopping needs, but salaries have not gone up so I can only half fill my shopping basket."
Every morning the price of milk sends Shankar Vemula into a state of despondency (Rhys Blakely writes). Mr Vemula, 40, a driver, lives with his wife, five children and his parents-in-law in a tiny one-room house. "Our morning litre of milk now costs 35 rupees (45p)," Mrs Vemula says. Three months ago it cost 18 or 20 rupees. The cost of everyday staples has soared. A bunch of spinach used to cost one or two rupees in the market, now it is seven or eight rupees, Mrs Vemula says. Brinjal, or aubergine, an Indian favourite, is now 30 rupees per kilogram – six months ago it was 15 rupees.
Saturday, April 19, 2008
Former 'Baywatch' star David Hasselhoff has reportedly agreed a divorce settlement with his ex-wife, which allows him to keep his nicknames and catchphrases.
According to 'Access Hollywood', the settlement papers in the case say that Hasselhoff will keep the rights to the names 'The Hoff' and 'Malibu Dave' and the catchphrase 'Don't Hassel the Hoff' in various countries.
As part of the settlement the actor has agreed to pay $25,000 a month to support his ex-wife Pamela Bach and his two daughters, 17-year-old Taylor and 15-year-old Hayley.
Hasselhoff and Bach divorced in 2006 after being married for more than 16 years.
From the Guardian:
It was with some trepidation that I went into the cellar this week to take some meter readings in order to find out how the solar panels we had fitted on our house exactly a year ago have been performing. Was the hefty sum of £8,500 we forked out last year a good investment or a waste of money?
Well, the news is better than I had expected. We, a family of four, have produced 92% of our electricity usage from the roof of a century-old terraced house in south-east London - laying to rest the idea that Britain is not sunny enough for solar power. It also disproves any suggestion this sort of technology only works in state-of-the-art, modern detached houses.
Not only will we not pay for any electricity, we should get a rebate of about £50 once a payment from the so-called renewables obligation (RO) scheme, which rewards microgeneration schemes with cash, is included.
In all, the saving for the past year will be around £500, giving a return on our investment of 6%, which is not subject to tax. Next year, when the payments from the RO scheme will double for photovoltaic (PV) solar installations, we will get about £150 back, giving a total return of 7%. That will rise further if energy prices continue to climb - which is likely after oil prices hit yet another high this week.
There is an important caveat here. I received a 50% grant for the system from the government's low-carbon buildings programme - the total cost of buying and installing the panels was £17,000. Unfortunately, the government is so pathetic at supporting low-carbon technologies that it last year cut the maximum grant to £2,500 because the scheme was so popular. As a result, demand has collapsed to the extent that the small company that fitted my system has gone out of business.
That means your return on a system purchased now will be lower - little more than 3% for one like mine this year, rising to close on 4% when the RO payments increase next year. Still, 4% that is not taxable is comparable to a building society account that you do pay tax on.
What is particularly annoying about all this is that in Germany, where a proper system of support has boosted volumes - the Germans kitted out 130,000 houses with solar PV last year, while the UK managed less than 300 - costs have fallen dramatically and a system like mine would only cost about £9,000 without a grant.
Our system works by producing power - up to 3 kilowatts - during the day and exporting much of it to the grid because we are out at work and school most days. It's fun to watch our old-fashioned meter spinning backwards when the sun is shining. We get 12p per kilowatt hour (kwh) for what we export, though we pay more for what we import in the evenings. But the RO payment of £105 makes up the difference. Mind you, in Germany, we would get about 35p/kwh. No wonder the Germans have gone mad for PV.
We are now with npower, although Scottish and Southern Energy offers a flat 18p/kwh including the RO payment which, in terms of sheer simplicity, has to be a winner, although my 12p plus RO is equivalent to around 18p. They also fit an export meter for free whereas npower estimates our exports at 50% of what we produce. I will soon have a new meter fitted because none of the power companies likes the idea of them turning backwards.
I left Powergen last year because the npower deal was the best on the market. Powergen, you may not be surprised to hear, was really difficult about my going. It couldn't grasp that my meter had gone backwards and unilaterally added 4,000 kwh (a year's consumption) to our final bill - daylight robbery, if you will pardon the pun. I had to really battle with them to get a final refund. This whole thing can be a hassle so make sure you choose the right supplier at the outset to avoid having to change.
Just as exciting as our solar output was the fact that, at the same time as fitting the panels, we took a bunch of measures in the house to cut our electricity consumption. We changed every bulb in the house (except the fridge and microwave) to low-energy ones, and replaced our ageing fridge and freezer. Meanwhile, our electric oven packed up last summer, so we replaced it with a gas one, figuring that generating heat with gas was probably a lower-carbon solution than doing it with electricity.
The upshot is that we cut our electricity use from 4,000 kilowatt hours a year over the previous five years to a tad under 3,000 kwh, a reduction of 25%. As our 3kw peak solar panels produced 2,730 kwh over the year, we only used about 250 kwh of electricity from the grid.
The PV system is not even on a south-facing roof - it faces south-east - and is at a shallower angle than would be ideal. But still it performed well, and will go on doing so for decades. The estimate of panel "degradation", or loss of performance, is said to be 0.5% a year, so negligible.
People seem fixated with asking how many years the system will take to pay back. I could answer the question at the current yield of 6%, but that is up to 7% next year, so the payback time will shorten. And if oil prices continue to rise, pushing up electricity prices, my yield will rise and the payback will shorten. So it is impossible to predict.
But all that misses the point. The system represents an improvement to the house that saves money. So it should generate a higher sale value if I move. People don't ask what the payback time is of a new kitchen or bathroom - also home improvements - so why do they ask about a carbon-saving technology?
What has been interesting is the effect it has had on us as a family. You might think generating your own power would make you relaxed about leaving lights on or the TV on standby. But the contrary is true. It has woken us all up to the realities of energy use. The computer, TV, lights, everything, we now turn off at the wall when they are not in use. We have some of those remote control switches to turn off wall sockets that are hard to get to. In future when we go on holiday, we will empty the fridge and freezer and switch them off. The challenge now is to raise that 92% figure to 100%.
The tumble dryer has long gone, and I feel that hair-dryer use may be excessive. But in a family with two girls, that may prove a struggle. However, I have my eye on the electric toothbrushes next! We are also turning our attention to our use of gas. Last year, our boiler packed up (it was an expensive year!) so we fitted a new, condensing one which will use less gas. And I am going to double the thickness of the loft insulation.
Longer term, I plan to fit a solar thermal system which should provide between 50% and 70% of our hot water. Then it would probably be worth plumbing a hot-water feed into the dishwasher and washing machine rather than using cold water heated by electricity.
If any readers have views on this, please let me know. The aim is to see how little energy a fairly average Victorian terraced house can use and what the costs involved are. So far, it has been about £10,000 to achieve the electricity savings mentioned above.
The additional loft insulation will be a few hundred pounds. A solar thermal system will be about £3,500.
Friday, April 11, 2008
A Mystery in the Middle East
By George Friedman
The Arab-Israeli region of the Middle East is filled with rumors of war. That is about as unusual as the rising of the sun, so normally it would not be worth mentioning. But like the proverbial broken clock that is right twice a day, such rumors occasionally will be true. In this case, we don't know that they are true, and certainly it's not the rumors that are driving us. But other things ? minor and readily explicable individually ? have drawn our attention to the possibility that something is happening.
The first thing that drew our attention was a minor, routine matter. Back in February, the United States started purchasing oil for its Strategic Petroleum Reserve (SPR). The SPR is a reserve of crude oil stored in underground salt domes. Back in February, it stood at 96.2 percent of capacity, which is pretty full as far as we are concerned. But the U.S. Department of Energy decided to increase its capacity. This move came in spite of record-high oil prices and the fact that the purchase would not help matters. It also came despite potential political fallout, since during times like these there is generally pressure to release reserves. Part of the step could have been the bureaucracy cranking away, and part of it could have been the feeling that the step didn't make much difference. But part of it could have been based on real fears of a disruption in oil supplies. By itself, the move meant nothing. But it did cause us to become thoughtful.
Also in February, someone assassinated Imad Mughniyah, a leader of Hezbollah, in a car bomb explosion in Syria. It was assumed the Israelis had killed him, although there were some suspicions the Syrians might have had him killed for their own arcane reasons. In any case, Hezbollah publicly claimed the Israelis killed Mughniyah, and therefore it was expected the militant Shiite group would take revenge. In the past, Hezbollah responded not by attacking Israel but by attacking Jewish targets elsewhere, as in the Buenos Aires attacks of 1992 and 1994.
In March, the United States decided to dispatch the USS Cole, then under Sixth Fleet command, to Lebanese coastal waters. Washington later replaced it with two escorts from the Nassau (LHA-4) Expeditionary Strike Group (ESG), reportedly maintaining a minor naval presence in the area. (Most of the ESG, on a regularly
scheduled deployment, is no more than a few days sail from the coast, as it remains in the Mediterranean Sea.) The reason given for the American naval presence was to serve as a warning to the Syrians not to involve themselves in Lebanese affairs. The exact mission of the naval presence off the Levantine coast ? and the exact deterrent function it served ? was not clear, but there they were. The Sixth Fleet has gone out of its way to park and maintain U.S. warships off the Lebanese coast.
Hezbollah leaders being killed by the Israelis and the presence of American ships off the shores of Mediterranean countries are not news in and of themselves. These things happen. The killing of Mughniyah is notable only to point out that as much as Israel might have wanted him dead, the Israelis knew this fight would escalate. But anyone would have known this. So all we know is that whoever killed Mughniyah wanted to trigger a conflict. The U.S. naval presence off the Levantine coast is notable in that Washington, rather busy with matters elsewhere, found the bandwidth to get involved here as well.
With the situation becoming tense, the Israelis announced in March that they would carry out an exercise in April called Turning Point 2. Once again, an Israeli military exercise is hardly interesting news. But the Syrians apparently got quite interested. After the announcement, the Syrians deployed three divisions ? two armored, one mechanized ? to the Lebanese-Syrian border in the Bekaa Valley, the western part of which is Hezbollah's stronghold. The Syrians didn't appear to be aggressive. Rather, they deployed these forces in a defensive posture, in a way walling off their part of the valley.
The Syrians are well aware that in the event of a conventional war with Israel, they would experience a short but exciting life, as they say. They thus are hardly going to attack Israel. The deployment therefore seemed intended to keep the Israelis on the Lebanese side of the border ? on the apparent assumption the
Israelis were going into the Bekaa Valley. Despite Israeli and Syrian denials of the Syrian troop buildup along the border, Stratfor sources maintain that the buildup in fact happened. Normally, Israel would be jumping at the chance to trumpet Syrian aggression in response to these troop movements, but, instead, the Israelis downplayed the buildup.
When the Israelis kicked off Turning Point 2, which we regard as a pretty interesting name, it turned out to be the largest exercise in Israeli history. It involved the entire country, and was designed to test civil defenses and the ability of the national command authority to continue to function in the event of an attack with unconventional weapons ? chemical and nuclear, we would assume. This was a costly exercise. It also involved calling up reserves, some of them for the exercise, and, by some reports, others for deployment to the north against Syria. Israel does not call up reserves casually. Reserve call-ups are expensive and disrupt the civilian economy. These appear small, but in the environment of Turning Point 2, it would not be difficult to mobilize larger forces without being noticed.
The Syrians already were deeply concerned by the Israeli exercise. Eventually, the Lebanese government got worried, too, and started to evacuate some civilians from the South. Hezbollah, which still hadn't retaliated for the Mughniyah assassination, also claimed the Israelis were about to attack it, and reportedly went on alert and mobilized its forces. The Americans, who normally issue warnings and cautions to everyone, said nothing to try to calm the situation. They just sat offshore on their ships.
It is noteworthy that Israeli Defense Minister Ehud Barak canceled a scheduled visit to Germany this week. The cancellation came immediately after the reports of the Syrian military redeployment were released. Obviously, Barak needed to be in Israel for Turning Point 2, but then he had known about the exercise for at
least a month. Why cancel at the last minute? While we are discussing diplomacy, we note that U.S. Vice President Dick Cheney visited Oman ? a country with close relations with Iran ? and then was followed by U.S. Secretary of Defense Robert Gates. By itself not interesting, but why the high-level interest in Oman
at this point?
Now let's swing back to September 2007, when the Israelis bombed something in Syria near the Turkish border. As we discussed at the time, for some reason the Israelis refused to say what they had attacked. It made no sense for them not to trumpet what they carefully leaked ? namely, that they had attacked a nuclear
facility. Proving that Syria had a secret nuclear program would have been a public relations coup for Israel. Nevertheless, no public charges were leveled. And the Syrians remained awfully calm about the bombing.
Rumors now are swirling that the Israelis are about to reveal publicly that they in fact bombed a nuclear reactor provided to Syria by North Korea. But this news isn't all that big. Also rumored is that the Israelis will claim Iranian complicity in building the reactor. And one Israeli TV station reported April 8 that Israel really had discovered Saddam Hussein's weapons of mass destruction, which it said had been smuggled to Syria.
Now why the Bush administration wouldn't have trumpeted news of the Syrian reactor worldwide in September 2007 is beyond us, but there obviously were some reasons ? assuming the TV report is true, which we have no way of establishing. In fact, we have no idea why the Israelis are choosing this moment to rehash the bombing of this site. But whatever their reason, it certainly raises a critical question. If the Syrians are developing a nuclear capability, what are the Israelis planning to do about it?
No one of these things, by itself, is of very great interest. And taken together they do not provide the means for a clear forecast. Nevertheless, a series of rather ordinary events, taken together, can constitute something significant. Tensions in the Middle East are moving well beyond the normal point, and given everything that is happening, events are moving to a point where someone is likely to take military action. Whether Hezbollah will carry out a retaliatory strike or Israel a pre-emptive strike in Lebanon, or whether the Israelis' real target is Iran, tensions systematically have been ratcheted up to the point where we, in our simple way, are beginning to wonder whether something has to give.
All together, these events are fairly extraordinary. Ignoring all rhetoric ? and the Israelis have gone out of their way to say that they are not looking for a fight ? it would seem that each side, but particularly the Americans and Israelis, have gone out of their way to signal that they are expecting conflict. The Syrians have also signaled that they expect conflict, and Hezbollah always claims there is about to be conflict.
What is missing is this: who will fight whom, and why, and why now. The simple explanation is that Israel wants a second round with Hezbollah. But while that might be true, it doesn't explain everything else that has happened. Most important, it doesn't explain the simultaneous revelations about the bombing of Syria. It also doesn't explain the U.S. naval deployment. Is the United States about to get involved in a war with Hezbollah, a war that the Israelis should handle themselves? Are the Israelis going to topple Syrian President Bashar al
Assad ? and then wind up with a Sunni government, or worse, an Israeli occupation of Syria? None of that makes a lot of sense.
In truth, all of this may dissolve into nothing much. In intelligence analysis, however, sometimes a set of not-fully-coherent facts must be reported, and that is what we are doing now. There is no clear pattern; there is no obvious direction this is taking. Nevertheless, when we string together events from February until now, we see a persistently escalating pattern of behavior. In fact, what we can say most clearly is that there is escalation, without being able to say what is the clear direction of the escalation or the purpose.
We would like to wrap this up with a crystal clear explanation and forecast. But we can't. The motives of the various actors are opaque; and taken separately, the individual events all have quite innocent explanations. We are not prepared to say war is imminent, nor even what sort of war there would be. We are simply prepared to say that the course of events since February ? and really since the September 2007 attack on Syria ? have been startling, and they appear to be reaching some sort of hard-to-understand crescendo.
The bombing of Syria symbolizes our confusion. Why would Syria want a nuclear reactor and why put it on the border of Turkey, a country the Syrians aren't particularly friendly with? If the Syrians had a nuclear reactor, why would the Israelis be coy about it? Why would the Americans? Having said nothing for months apart from careful leaks, why are the Israelis going to speak publicly now? And if what they are going to say is simply that the North Koreans provided the equipment, what's the big deal? That was leaked months ago.
The events of September 2007 make no sense and have never made any sense. The events we have seen since February make no sense either. That is noteworthy, and we bring it to your attention. We are not saying that the events are meaningless. We are saying that we do not know their meaning. But we can't help
but regard them as ominous.
Monday, April 07, 2008
[[[ Are you still worried about global warming? You need not worry, at least not this year. The BBC reported that global temperatures will drop "slightly" this year as a result of the cooling effect of La Nina current in the Pacific, quoting UN meteorologists. The World Meteorological Organization's secretary-general, Michel Jarrud, told the BBC it was likely that La Nina would continue into summer. So according to the BBC that this would mean global temperatures have not risen since 1998. Of course global warming experts say, "we are still clearly in a long-term warming trend" and they forecast a new record high within the next five years. Yet excuse me if I am wrong. I do not remember even one global warming expert predicting that global temperatures would not rise over the last decade. Could this be the lost decade when it comes to global warming?
And what about those fears that the global warming experts raised about natural disasters? Didn't some say that the active hurricane season we had in the Gulf of Mexico and the strange weather that was happening all over the country and the globe was due to unmistakable global warming? Yet how is this possible if global temperatures have not risen in the past ten years? Why were we not having these events 10 years ago?
This is also having and impact on business in a strange way. The Guardian Press reported that Lloyd's of London warned that an absence of natural disasters man-made and otherwise was putting pressure on firms to reduce premiums in 2008. The world's oldest and largest insurers of natural disasters were being squeezed. The company said at least half of their business was conducted in the US last year. It was a major insurer of the Florida seaboard and oil rigs in the Gulf of Mexico. The Guardian says yet after two years of relatively few claims for environmental damage, it has increased competition in the sector. That means for futures this hurricane season the "hurricane premium" will be lower as well. That also means if we do have an active hurricane season the move will be much stronger to the upside! I am not panicked about global warming but just to be safe you might want to by some cheap natural gas calls. ]]]