FAO reinforces fears of another food crisis in the world
Reuters 15/03/2011
The increase in global prices of staple foods increases the risk that the 2007-2008 food crisis in developing countries repeat itself, said yesterday the president of the Agency for Food and Agriculture Organization (FAO) of the United Nations (UN).
A jump in oil prices and the rapid consumption of global cereal stocks could be a harbinger of the supply crisis, said director-general of FAO, Jacques Diouf told Reuters in an interview during a visit to the UAE.
"The high price increases concerns and we are rapidly reducing the inventory," he said. "For years we have warned that it takes greater productivity and investment in agriculture."
The food price index of the UN in February rose for the eighth consecutive month to its highest level since at least 1990. All groups of commodities, except sugar, have increased in the last month.
Diouf said, until a few months, that global stocks of grain were at healthier levels than the restricted stock that triggered the crisis in 2007 and 2008. Last July, the inventory levels were 100 million tonnes higher than in 2007 but the economic advancement in developing countries and a return to growth in highly industrialized countries have led to further reductions.
Some countries in North Africa and the Middle East have made large purchases of grain to avoid conflict - partly stimulated by the high food prices - such as those that brought down the leaders of Tunisia and Egypt.
South Korea seeks to raise grain stocks and plans to buy loads of corn and other commodities in an effort similar to other Asian nations, concerned about high food prices and social unrest. In December, Mexico has purchased thousands of tons of corn in the futures market to hedge against high price of tortillas, which triggered clashes in the streets in 2007. "It's a reasonable thing to do, to protect themselves," said Diouf.
The recent rise in oil prices, which rose to about $ 120 a barrel last month, is exacerbating the increases in food prices, which can affect the ability of developing countries to cover its import needs, said Diouf. Oil prices have an impact on transport costs and agricultural inputs, including fertilizers.
FAO urged developed countries to reconsider their strategies for biofuels - which include large subsidies - as they have diverted 120 million tons of cereals for human consumption for fuel production.
"We are urging member countries to revisit their policies," said Diouf. "Having more energy does not mean you need to produce more biofuel."
Developed countries give $ 13 billion annually in subsidies and protection, to encourage biofuel production, said Diouf. In the States United States, the stocks of corn reached the lowest levels in 15 years, while major portions of the crop are used to produce ethanol. Avoid
another food crisis depends on the productivity of the crop in the next harvesting season, as well as the impact of economic growth on demand, Diouf said. But he also said that the increase in food prices and oil prices may adversely affect growth. He said it was too early to determine whether the recent earthquake and tsunami in Japan, the largest grain importer in the world, have no effect on the total supply or demand for agricultural products
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