The Effect of Oil Prices on the Food Industry

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When the oil price skyrocketed in 2011, most industries had to bear this price, and the food industry was no exception. The present food sector, including its price is highly transport and fuel dependant. The relationship between fuel and the food industry is systematic and independent. The rise in fuel prices leads to an increase in the price of food. It is important to note that most food-producing firms and farms use machines that hugely depend on fuel to function. They depend on fuel to transport crops and seedlings to farms, to transport food products to the market and to fuel farm equipments. Oil is also used as input in some farm chemicals. When oil price increases, pressure is put on the food system. When the price of oil increases, pressure is put on the entire food production process from production to supply, to the market. The dependency of food production on oil is imminent. In 2011, the food prices reached a new peak in terms of prices. This can hugely be attributed to the rise in oil prices. The food crisis was experienced globally and it led to serious impacts. In developing countries, riots broke out due to the rise of food prices. In these countries, several women and children slept hungry because they lacked finance to purchase food (Organization of the United Nations, 2011).
As oil prices increased, the demand for bio-fuel also increased, this made the prices of food to increase steadily. The rise of food prices increased as farm crops are used to make bio-fuels. Bio-fuels are attained from agricultural products mostly from corns. As the demand for bio-fuels increased in 2011, the prices of food increased, making food to be less affordable.
In 2011, the United Nations Food and Agricultural organization (FAO) ...

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...became expensive. This directly transmitted down to the consumers as the food prices rose globally. This incidence led to global unrest and many people died due to hunger and poverty. This situation needs to be prevented from happening again. A sustainable and economical food production process, that is not dependent on oil cost should be developed to avert such a crisis (Steger, Goodman & Wilson, 2013).

Works Cited

Lee, D. R., & Ndulo, M. (2011). The food and financial crises in Sub-Saharan Africa: Origins, impacts and policy implications. Wallingford, Oxfordshire: CABI.
Organisation for Economic Co-operation and Development., & Food and Agriculture
Organization of the United Nations. (2011). OECD-FAO agricultural outlook 2011-2020. Paris:
OECD/FAO.
Steger, M. B., Goodman, J., & Wilson, E. K. (2013). Justice globalism: Ideology, crises, policy. London: SAGE.

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