Food markets still volatile, warns UN

20 September 2010

20 September | Helen Gilbert

A top UN official has rejected claims the world is heading for a repeat of the 2007-2008 global food crisis but has warned the current turbulence in the international food markets is likely to continue.

The message from Hafez Ghanem, assistant director-general for economic and social development at the Food and Agriculture Organisation of the UN comes as Russian prime minister Vladimir Putin recently extended the country’s ban on grain exports, stoking fears that prices of food staples would continue to rise.

Ghanem confirmed a meeting was due to be held between the FAO and the Inter-Governmental group on Grains in Rome on 24 September, but said the talks were not an “emergency” measure.

Instead, the meeting will bring policy makers and experts together to exchange information and discuss the current situation face to face.

Ghamen said: “Better information means more market transparency and that should mean less volatility. Also discussed will be the question of what countries should do in the medium term to enhance their preparedness for future episodes of volatility.”

He also pointed out that despite the shortfall in Russia’s wheat production, this year’s cereal harvest was the third highest on record and stocks are high. “Under these conditions we don’t believe that we are headed for a new food crisis,” he said.

“As regards the overall supply and demand situation, there’s no cause to worry. The picture could, however, change if there is another shock to supply, for example due to more bad weather, or if government policies lead to increased anxiety in the market, provoking panic buying.”

He warned, however, that markets were set to become more volatile due to factors such as extreme weather caused by climate change.

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