THE Group of 20 leading economies have started working-level talks on the soaring food prices that are stoking fears of a repeat of the 2008 food crisis.
Global food prices hit a record high last month, outstripping the levels that sparked riots in several countries in 2008, and key grains could rise further, the United Nations’ food agency said this week.
Policymakers’ major concern is that, if unchecked, rising food prices could stoke inflation, protectionism and unrest.
Hundreds of youths clashed with police in several Algerian cities including the capital yesterday over food prices and unemployment, residents said.
Rising food prices could also set back the recovery from the financial crisis by eroding consumers’ disposable budgets in the fast-growing emerging economies that are leading the revival.
Rhee Chang-yong, who represents South Korea at the G20, said working group talks were under way in the G20 with the aim of improving global cooperation to resolve food security problems ahead of a summit hosted by France.
“France is emphasising food security. As a former host country of G20, we would like to deal with the price volatility problem thoroughly,” Rhee said.
French President Nicolas Sarkozy has asked the World Bank to conduct urgent research on the impact of food prices, Reuters sources said.
Last year, wheat futures prices rose 47 per cent, buoyed by bad weather including drought in Russia and its Black Sea neighbours. U.S. corn rose more than 50 per cent and US soybeans jumped 34 per cent.
The UN Food and Agriculture Organisation said in a report on Wednesday that sugar and meat prices were at their highest since its records began in 1990. For wheat, rice, corn and other cereals, prices were at their highest since the 2008 crisis.
During that crisis, riots broke out in countries from Egypt to Haiti. Import prices jumped, forcing many countries' trade balances into a deep and costly deficit and several governments in Asia imposed export restrictions on rice.
City A.M. Reporter