The Oil Drum

This is a guest post by Yair Wallach. Originally from Jerusalem, he is completing his PhD in Cultural History in Birkbeck College, the University of London (writing about Palestine/Israel between 1858 and 1948). During his five years of study in London he has lived in precarious conditions, spending many months without electricity or hot water. These experiences have made him aware of issues of environmental sustainability, especially relating to energy, water, waste and the global food market. He currently makes his living by writing articles of economic analysis on the Middle East.

Abstract

The use of food crops for biofuels is one of the key factors driving a dramatic increase in the global price of cereals. As Stuart Staniford demonstrated here in the past few weeks, this trend is set to intensify. This article will look at the potential implications of rising wheat prices for countries in the Middle East, taking Egypt and Morocco as examples. Government food subsidies in both countries have so far protected the poor urban population from much of the global hike in cereal prices. However, as food prices continue to spiral, subsidies will demand a growing share of national budgets. Subsidies cuts seem inevitable, leading to riots and political instability.

The further development of biofuels could make food too costly for millions of poor in the Middle East, and destabilise the region which supplies most of the world’s oil exports.