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US drought already rippling out into the world

Scuffles in Jakarta markets between tofu producers and soybean traders may be a taste of things to come.

By Staff writer / July 27, 2012

A worker runs soybeans through a machine in a warehouse belonging to a tofu factory in Jakarta, Indonesia, July 25.

Supri/Reuters

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Much of America's grain belt is gripped in one of the worst droughts in 50 years, and grain prices are already surging.

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Staff writer

Dan Murphy is a staff writer for the Monitor's international desk, focused on the Middle East. Murphy, who has reported from Iraq, Afghanistan, Egypt, and more than a dozen other countries, writes and edits Backchannels. The focus? War and international relations, leaning toward things Middle East.

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While that's bad news for America's farmers, the real danger is the effect that will have in poor countries, where even small shifts in prices can have a big impact on the living standards of hundreds of millions of people from Central America to Egypt (the biggest wheat importer in the world) and right across to Indonesia and China

The US is the world's largest wheat and corn exporter, and its third largest exporter of soybeans. This is less of a case of the beat of a butterfly's wings causing a storm on the other side of the globe then a storm here causing a catastrophe elsewhere. With the northern hemisphere summer less than half over, and no relief in sight for the US drought, the impact of rising food prices globally is set to become a big story in the months ahead.

IN PICTURES: Drought in the USA

Globalization has its upsides, but it also means that a peddler in Mexico City or a factory worker in Mumbai is more vulnerable than ever to the whims of North American weather and agricultural policies in the developed world.

Already some places are grappling with the issue. Take Indonesia, where soybeans are used to make tofu, the staple protein for the country's poor. There, soybean prices have risen 33 percent in the past month, and are already causing tensions. Yesterday, there were clashes in Jakarta and other major cities in markets as a coalition of tofu producers sought to enforce a national production strike protesting against a 5 percent soybean import duty.

At the Rawamangun wet market in East Jakarta, members of the Indonesian Tempeh and Tofu Cooperative (Kopti) attacked tofu and tempeh sellers who went against a verbal directive not to sell the two food items. Tofu and tempeh, derived from soybeans and eaten mainly with rice, are staples for many Indonesians as they are among the cheapest sources of protein... Suyanto, head of the East Jakarta chapter of Kopti, said the sweep was aimed to create a common goal between producers and traders as well as demonstrate against high soybean costs. The commodity’s price has risen 33 percent in the past three weeks to Rp 8,000 (85 cents) per kilogram, mainly due to a drought in the United States that has shortened supplies.

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