The Factors Cause the Rise in Agricultural Price from Middle 2012
1.0 Introduction
Having experienced a food crisis from 2007 to 2008, the world was quite for a short period. From early of 2010, the price of many agricultural products kept rising in the whole world. A new round of food crisis affected people. Within 3 month from April to June of 2012, the price of wheat and soybean rose 17% and 12%, respectively. In July, the price of Australian barley surged 56%. At the same time, the Chicago wheat price also rose 36%. After August 5, Russia announced the suspension of agricultural products export, wheat price in Chicago rose 8% on the basis of July. It was the highest level since up to 23 months. As we know, food price is determined by market through demand and supply. Any change in demand and supply will change in the price. This essay will explain the factors that cause the rise in agricultural price from mid-2012 and discuss the factors that are likely to determine food price in the long-run. (http://www.cccfna.org.cn/article/%E7%94%B5%E5%AD%90%E6%9D%82%E5%BF%97/4393.html)
2.0 Factors that cause food price to increase
Demand and supply are such pervasive words use for good reason. They are the forces that make the market economies work and determine the prices of many different goods and services together. Prices in turn are the signals changing in demand and supply. If we keep other factors constant, in a given period time, demand stands for that consumers have the ability and willingness to buy a specific quantity of goods at a particular price. Price and quantity demanded are negative relationship. The higher price, the lower the quantity demanded. The lower price, the higher quantity demanded. Supply indicates that suppliers or sellers have the ability and willingness to sell or produce a particular product and service at a particular price. Price and quantity supply are positive relationship. The higher price, the greater quantity supplied. The lower price, the lower quantity supplied. Diagram 2 shows
Having experienced a food crisis from 2007 to 2008, the world was quite for a short period. From early of 2010, the price of many agricultural products kept rising in the whole world. A new round of food crisis affected people. Within 3 month from April to June of 2012, the price of wheat and soybean rose 17% and 12%, respectively. In July, the price of Australian barley surged 56%. At the same time, the Chicago wheat price also rose 36%. After August 5, Russia announced the suspension of agricultural products export, wheat price in Chicago rose 8% on the basis of July. It was the highest level since up to 23 months. As we know, food price is determined by market through demand and supply. Any change in demand and supply will change in the price. This essay will explain the factors that cause the rise in agricultural price from mid-2012 and discuss the factors that are likely to determine food price in the long-run. (http://www.cccfna.org.cn/article/%E7%94%B5%E5%AD%90%E6%9D%82%E5%BF%97/4393.html)
2.0 Factors that cause food price to increase
Demand and supply are such pervasive words use for good reason. They are the forces that make the market economies work and determine the prices of many different goods and services together. Prices in turn are the signals changing in demand and supply. If we keep other factors constant, in a given period time, demand stands for that consumers have the ability and willingness to buy a specific quantity of goods at a particular price. Price and quantity demanded are negative relationship. The higher price, the lower the quantity demanded. The lower price, the higher quantity demanded. Supply indicates that suppliers or sellers have the ability and willingness to sell or produce a particular product and service at a particular price. Price and quantity supply are positive relationship. The higher price, the greater quantity supplied. The lower price, the lower quantity supplied. Diagram 2 shows