Just heard about bush blaming India for food price hike in United States / Globally.. I am really not sure about knowledge of Mr. Bush. According to Bush, the prices hiked because middle class people in India are getting paid more so they are demanding higher quality or nutritious food. So there is more demand and there is less supply.
I understood the logic of higher demand and lower supply but what does it have to do with India? If people here are earning more and paying for higher quality for good then how does it matter to him?
Is he plain jealous about growth of India or he did not have anything better prepared for his speech?
Following were his statements:
Prosperity in countries like India is good but it triggers increased demand for better Nutrition, which in turn leads to higher food prices.
Worldwide, there is increasing demand. There turns out to be prosperity in developing world, which is good. It’s going to be good for you because you’ll be selling products in the countries, you know, big countries perhaps, and it’s hard to sell products into countries that aren’t prosperous. In other words, the more prosperous the world is, the more opportunity there is.
It also, however, increases demand. So, for example, just as an interesting thought for you, there are 350 million people in India who are classified as middle class. That’s bigger than America. Their middle class is larger than our entire population.
And when you start getting wealth, you start demanding better nutrition and better food, and so demand is high, and that causes the price to go up.