Price volatility is 'major threat' to food security: FAO
Monday 27 September 2010
The UN's Food and Agriculture Organisation said recent price volatility was a "major threat" to food security but that no crisis was in sight after holding an extraordinary meeting in Rome on Friday.
Experts from more than 75 governments gathered to discuss the recent spikes in food prices following Russia's decision to halt grain exports after fires and drought destroyed a quarter of its crops this summer.
Although international wheat prices have soared by 60 to 80 percent since July and the price of maize grew by about 40 percent, there is "no indication of an impending world food crisis," FAO said in a statement.
FAO said this year's cereal harvest was the third highest on record.
Experts said cereal supply and demand appeared "sufficiently in balance" and that "unexpected crop failure ... national policy responses and speculative behaviour" were to blame for the recent rise in food prices.
Participants at the meeting recommended exploring "new mechanisms to enhance transparency and manage the risks associated with new sources of market volatility" such as the lack of information and panic buying and hoarding, the statement said.
Russia is still struggling with the aftermath of its hottest summer on record, which caused major damage to crops and prompted the government to slap a highly controversial ban on grain exports to protect domestic supplies.
This contributed to soaring global wheat and overall food prices and sparked worries of a crisis in global food supplies such as the one in 2007-2008, when food shortages sparked demonstrations throughout the developing world.
Earlier this month, Mozambique reversed an increase in the price of bread that sparked deadly rioting.
The price hikes in bread and electricity kicked off three days of rioting that left 13 dead and about 400 injured, with 286 people arrested, according to government.
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