Worries of a global food crisis

Ahram Online and Reuters, Sunday 16 Jan 2011

The issue of rising food prices that helped topple the Tunisian regime is focusing the attention of governments around the world as well as the anger of their citizens

A Tunisian revolution that broke out over, more than anything else, soaring food prices, grasped the attention of world leaders urging them to consider the importance of the issue.

Even before the ousting of the Tunisian President Zine El Din Ben Ali, riots had swept through Jordan and Algeria.

India is battling the highest inflation of any major Asian economy, and spiralling food and fuel prices have damaged voter confidence in the Congress-led government and highlighted stresses in the multi-party coalition.

But a senior official of the UN's food agency played down concerns that tighter supplies of food could lead to a repeat of the 2008 food crisis because stocks were ample.

The European Union's executive on Friday played down the risk of a repeat of 2008's food price crisis, saying current world grain stocks were much higher than then, but warned the era of cheap food had ended.

Last week, the U.N.'s Food and Agriculture Organisation (FAO) said its measure of food prices had hit its highest since records began in 1990, topping levels seen in 2008 when price spikes sparked deadly riots.

The European Commission's farms spokesman Roger Waite said the FAO's food price index is weighted according to the export share of developing countries, and that global prices for wheat, maize and rice were all significantly below their 2008 peaks.

"We think that in the EU there will be a supply response (in the shape of increased production) which will allow prices to calm down a little bit," Waite told Reuters in an interview.

"Still, even after 2012 when prices come down to a more normal level we are left on a different plateau. We are at a much higher level than we used to be in the first part of the 2000s," he added.

The Commission was making the point that while future food prices are unlikely to return to the very low levels seen at the turn of the millennium they are still well below the peaks seen in 2008, echoing comments in a World Bank report this week.

The World Bank said that while food prices ended 2010 just 7 per cent below their June 2008 peak in dollar terms, in real local currency terms they remained 30 per cent below that level.

Burns discounted any long term risk of global food shortages, projecting that agricultural productivity growth would exceed population growth for the planet as a whole.

Nevertheless world leaders seem worried, the EU Times said a report prepared by France's General Directorate for External Security and acquired by Russian intelligence SVR stated that President Barak Obama and Nicolas Sarkozy have reached a preliminary agreement to jointly deal with a possible global crisis.

This involves creating a joint US-European armed task force to solely counter a world-wide uprising expected to erupt in the face of a food crisis.

French concerns stirred primarily against the backdrop of Algerian and Tunisian riots.

World Bank's President Robert Zoellick warned that the world was just "one poor harvest away from chaos."

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