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The FAO also issued the following statement:

A combination of factors, including reduced production due to climate change, historically low levels of stocks, higher consumption of meat and dairy products in emerging economies, increased demand for biofuels production and the higher cost of energy and transport have led to surges in food prices.

For commodity bulls, the above comment is fairly obvious. What is alarming, however, is that the FAO also warned that the food shortages and rising prices would most likely contribute to food riots in all parts of the globe.

The president of the World Bank, Robert Zooellick, also stated that he believed 33 nations are currently at risk because of rising food prices. He went on to state that:

For countries where food comprises from half to three quarters of consumption, there is no margin for survival.

Food riots in various degrees have already taken place in India, Mexico (tortilla strike), the Philippines and Haiti, among others. In Port Au Prince, the newswires report, aid organizations fear the food crisis could deepen. Skyrocketing food prices have already led to deadly protests, and the ousting of Haiti's No. 2 politician.

Gold Food Price Inflation

In the same way that lower to middle income households are the first to notice economic downturns and inflationary pressures, underdeveloped economies are the first to experience the negative impact of rising food prices.

One big reason has to do with the fact that many citizens of poor countries spend as much as 75% of their income on food. While these struggling economies might not have an immediate impact on the lives of westerners, the instability that will develop in these regions will clearly impact global productivity. Ultimately, this will translate into bad news for even the most developed economies.

Focusing on the specific areas currently in a food crisis , the potential to breed civil war and regional unrest is evident. Why? Because when people are starving, the first to get blamed is the government in power. The second step is to get food by all means necessary. This ultimately means political crisis and chaos.