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Commodities chaos sows seeds of protest

Thursday, September 03, 2015 - 01:43

Thousands of farmers converge on Paris calling for additional government support and structural reforms to help the ailing agricultural sector. As Ivor Bennett reports, volatile commodity prices are part of the problem and that's not confined to France.

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An agricultural army on the march. Nearly 2000 French farmers - and their tractors - on their way to Paris in protest over low prices. (SOUNDBITE) (French) FRENCH FARMER, PASCAL MEHEUT, SAYING: "We're living off the good years and it's been like that for years now. I think everybody's fed up, we're really waiting for some support from the government, a real political strategy that becomes a real cause." Livestock is one of the sectors heaviest hit. The tumbling prices have forced some pig farmers to reduce their stock by 75 percent. Farmers blame foreign competition and a squeeze on margins by retailers. And when it comes to dairy, there's also a supply glut, says Rabobank's Jane Foley. SOUNDBITE (English) JANE FOLEY SENIOR FX STRATEGIST, RABOBANK, SAYING: "Some of this is of course part of a slower than anticipated demand, a lot of that coming through from China. And inevitably it'll take some time for these gluts to work through the system." Across the globe, though, farmers are having the opposite problem. A strengthening El Nino has seen onion prices in India more than triple since June. Sugar, rice and palm oil prices could also soar in a prolonged drought. Its impact unlikely to be confined to food, says Bill Blaine from Mint Partners. SOUNDBITE (English) BILL BLAINE, CAPITAL MARKET STRATEGIST, MINT PARTNERS, SAYING: "One of the things I've always looked at is what really drives the price of gold? Well one of the major influences is Indian farmers, buying gold for their daughters' weddings. And if they're undergoing drought, they have less money and they spend less. So guess what happens to gold prices?" Harder to answer - will these protests have any effect? Farmers are planning an even larger demonstration in Brussels next week, hoping it'll provide more than just food for thought.

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Commodities chaos sows seeds of protest

Thursday, September 03, 2015 - 01:43