Brussels Journal:

The Financial Times reports that China is to introduce taxes on grain exports.

Exporters of 57 types of grain, including wheat, rice, corn and soya beans, will have to pay temporary taxes of between 5 and 25 per cent, the country’s Ministry of Finance said on Sunday.

We in the European Union are currently subsidizing the Common Agricultural Policy to the tune of dozens of billions a year, meanwhile China is introducing export taxes on grain… of up to 25%. Now the Chinese don’t do things by accident.

With grain prices in the UK doubling in the last 12 months, and their being a global shortage of food, expect that food inflation over the next year to leap. Of course this won’t just affect the price of bread and risotto. The largest cost in chicken, pig and cattle is fodder. Beer will go up even more.

As The Telegraph points out today,

This will be a global trend […] but higher food costs too. In 2007, wheat prices doubled – with the price of other crops like cocoa and coffee also jumping.

Next year, the growing – and increasingly wealthy populations of the developing world will keep global food demand rising. Global supplies – hit by more droughts, floods and the increased use of land for bio-fuel production – will struggle to keep up.

That’s why, in 2008, high food prices will replace expensive oil as the bogeyman of Western consumers and central bankers. Because food accounts for a large portion of disposable incomes, escalating food prices will seriously dent consumer confidence next year, while preventing deep base rate cuts.

What does the the EU do? As Chris Booker states today, many of these problems are either caused or exacerbated by the European Union; a sclerotic conception which has an elderly system designed to deal with the like of Pharaoh’s dream of seven fat years, but utterly unprepared for his nightmare of seven years of fallow.