Lehman Brothers: food price inflation a long-term phenomenon

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Assumptions that food price inflation will soon become 'yesterday's issue' are misplaced, with higher global prices set to be a long-term phenomenon, according to Alastair Newton, chief political analyst at Lehman Brothers.

Furthermore, he believes that there are significant implications of higher prices for a range of countries which are of direct relevance to financial markets. These include impacts on economic performance and, potentially, on political stability, he said. Newton sees food price inflation as a long-term trend because of three main factors: rapidly rising incomes and changing dietary habits in Asia, the sustained period of relatively low growth in global agricultural productivity and the drive to develop biofuels. He said: "The political consequences, both direct and arising from some o...

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