Urgent action is needed to ensure rising world food prices don't turn into a catastrophe, the United Nations said Tuesday, but it cautioned that panic buying and export restrictions are not the solution.
Fears of a repeat of the 2007-08 world food crisis have been ra ised by recent sharp increases in the price of corn, wheat and soybeans, as summer droughts have scorched crops across the globe, but such problems could be prevented by swift, coordinated international action, the Food and Agriculture Organization, World Food Programme and International Fund for Agricultural Development said.
Last week the World Bank said world food prices jumped 10% in July, as U.S. corn and soybean production has suffered in the grip of a record-breaking drought. Similar conditions in Russia, Ukraine and Kazakhstan have taken a toll on wheat production.
The U.N. agencies said in a joint statement that adverse weather has driven all three international food price spikes in the last five years, while increased financial speculation and diversion of stock for non-food purposes have also contributed to increased prices and volatility.
Food price inflation climbed toward the top of the international agenda after hitting successive record highs in the early part of 2011 amid global supply concerns, while rising food prices were also partly cited for sparking unrest that saw the leaders of Tunisia, Egypt and Libya fall.
The FAO, WFP and IFAD said two interconnected problems must be tackled: the immediate issue of high food prices which can impact heavily upon import-dependent countries and the poorest people; and the long-term issue of how food is produced, traded and consumed in an age of increasing population, demand and climate change.
World Bank forecasters had been expecting a calm year for global food prices in 2012 until the effects of the droughts in the U.S. and Eastern Europe kicked in this summer. Now food prices are expected to remain elevated for the foreseeable future "as a consequence of increasing supply uncertainties."
Indeed, the global grain market has been jittery in recent days as Russia decides how to cope with its drought-plagued harvest. Commerzbank said the situation continues to cause serious confusion, with many skeptical of the government's repeated claims that it won't impose any export ban on wheat.
This is because Moscow-based think tank SovEcon has once again revised its crop estimate down to 38 million metric tons, the bank said, only just above Russia's own estimated demand regardless of repeated large-scale exports to Egypt...
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