Calm down, inflation is under control, or is it. Letter from the USA Food prices to soar worldwide Fazle Rashid from New York 4/11/2007 THE prices of foods will soar world wide warned the Wall Street Journal (WSJ) in a report. The gloomy prospects are already evident. India, a food exporting country, has now turned into a food importing country. In China steady shrinkage of arable lands due to excessive demands of lands for industrial complexes has resulted in decline for farm products. More important than that is President Bush's call to Americans to get rid of the 'addiction to Middle-East oil'. Corn, palm oil, sugarcane and other crops are being used for the ethanol and biodisel, two important alternatives to oil. This will be one single factor that will push the prices of all farm products, the WSJ said. The rise in food prices is already causing distresses in many parts of the world. Politicians in these countries are worried about the rising trend. The rising cost of foods could fuel political unrest. The present global grain stocks are at their lowest in the past 30 years. In US alone, 30 per cent of grain harvest will be used for the production of ethanol and biodisel. India and China, the WSJ report said, are appearing to be reaching a point at which nothing short of a bumper crop could prevent a crisis. The prices of farm products continue to climb in China and India. Higher farm prices are not bad for all. It will boost income of farmers in developing nations who have gained very little from the growth of manufacturing and services sectors. So far the soaring prices of food have not caused any major inflationary pressure, the WSJ said. Economies of China and US, which may appear very perplexing, seem to be intertwined. China will bear the brunt if the US economy weakens, the analysts forecast. About a fifth of China's exports goes to the US markets. China's exports have grown by 30 per cent for the past five years. China is the world's fourth largest economy, the WSJ noted. China's economic growth is not solely dependent on export. Export of course is the prime reason but other factors like new factories, highways and housing have also contributed. China's currency has risen against dollar making its exports more expensive. Many manufacturers are defecting to cheaper locations like Vietnam. Yet China's export earnings have not suffered much. Its export earnings recorded a 27 per cent rise in 2006. China and Japan, two economic giants of Asia, have frosty ties. The bilateral relations between the two have been summed up like this: "Politics cold, economy hot". The bilateral trade between the two countries have doubled in past four years. The export of capital machinery and chemicals to China have helped Japanese economy to rise from a slump. The frosty diplomatic ties between Beijing and Tokyo is likely to witness some changes during Prime Minister Wen Jibao's slated visit to Japan from April 11 to 13. He will address the Japanese parliament which a Chinese prime minister has never done before. This will be a return visit.. Earlier Prime Minister of Japan Shinzo Abe visited China in September last year. Two Asian giants now concede that their political squabble should not hamper their economic ties. Each country benefits from trade and investment with the other. Japan's top trading partner is China. China's third largest trading partner is Japan after the US and the European Union (EU).