x Abu Dhabi, UAEThursday 20 July 2017

UN meeting to address global food price volatility

The Food and Agriculture Organisation has scheduled the one-day meeting to take place in Rome on September 24 in response to volatility in the world cereal markets.

NEW YORK // With drought in Russia adding to turmoil on the global wheat market, UN food chiefs have called a special meeting to avoid a repetition of the food-price hikes that sparked riots across parts of the developing world three years ago. The Food and Agriculture Organization (FAO) scheduled the one-day meeting to take place in Rome on September 24 in response to volatility in the world cereal markets, with food concerns already increasing tensions across the world.

Russia's decision last week to extend a wheat export ban until 2011 was expected to increase anxiety in cereal markets, while food riots in Mozambique claimed the lives of 10 people and saw 288 injured. Pakistan's floods have wiped out more than half a million tonnes of wheat seed stocks, while drought, flooding and high food prices in Niger have pushed almost half of the country's 15 million people towards hunger.

"It is a special meeting because, so far, there is no emergency on the markets - but a lot of volatility" in cereals trading, an FAO official told Agence France-Presse late last week. Wheat prices experienced their biggest monthly rise in almost a year in August, according to the FAO's Food Price Index, climbing by five per cent after persistent drought in Russia, a major producer, and that country's subsequent restriction on sales.

FAO officials said the meeting was not an emergency session and dismissed any comparison with the global food crisis of 2007-2008, when shortages and price hikes sparked riots across parts of the developing world. David Dawe, an FAO economist, said that although the recent turmoil is a cause for concern, the so-called fundamentals of the wheat market are far more solid than they were before the food crisis of 2007-2008. "The reaction in the wheat markets is a bit overdone - maybe even substantially overdone," he said in a UN statement because global stockpiles and overall crop production remain at relatively high levels. "There is uncertainty out there. Agriculture markets are always uncertain because of the weather ? but it would be premature to think that the situation would get worse."

On Wednesday and Thursday, violence engulfed Mozambique's capital, Maputo, where bread prices have risen by 17 per cent, increasing the pressure on householders who struggle with an average income of just US$794 (Dh2,916) a year. In Pakistan, where wheat-based flatbreads, which are the main food in rural communities, UN officials are warning that flooded land and ruined seed stocks are threatening the planting season, between September and November.

"Unless people get seeds over the next few weeks they will not be able to plant wheat for a year," Daniele Donati, an FAO emergency official, said. "Food aid alone will not be enough. If the next wheat crop is not salvaged, the food security of millions will be at risk." @Email:jreinl@thenational.ae