Lack of Food Storage Capacity Impact the Price Hike in Bangladesh

Topics: Supply and demand, Futures contract, Food security Pages: 4 (928 words) Published: January 14, 2013
Lack of Food Storage Capacity Impact the Price Hike in Bangladesh Ahmed, Md. Foysal, 11-95015-3, MBA, American International University Bangladesh Background
I will focus on the investment opportunity in storage capacity for food security to cover my future demand and also managing crisis. It also relates the demand and supply in the food market to control the price within reasonable level. Of course not only lack of storage capacity is involved in price hiking but there are many reasons behind this issue, in this case I will only focus on investment opportunity in food storage infrastructure development and its relevant facts. It is also related with the import and export of food from Bangladesh. However, continuous investments are needed to stimulate the efficiency of these expanding food grain markets, as even small reductions in margins can lead to enormous benefits for producers as well as consumers. Various interventions and investments are further needed to assure that Bangladesh can successfully meet the challenges of produce on and marketing of high-value products, especially relating to food quality and safety. (Minten, et al, 2010)

Literature Review
As long-term solutions to the food price crisis are sought, it is important to understand the root causes of the problem. The crisis was triggered by a complex set of long- and short-term factors, including policy failures and market overreactions. One important factor in the crisis could had been the entry of significant financial resources into futures markets, including food commodity markets, which could have contributed to a price spike during the first six months of 2008. It is important to note that still there is no common agreement among experts on this and there is significant discussion around the possibility that channeling financial resources through commodity futures markets may have triggered the food crisis and in particular the role of speculators in the crisis. Establishing...
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