UN: No global food crisis looms despite Russian wheat shortfall, but market turbulence likely

UN: No food crisis looms despite Russia wheat ban

ROME — No global food crisis appears to be looming despite a Russian wheat shortfall that has helped lift prices to their highest level in two years, but volatile food commodities markets need better regulation, a U.N. agency said Tuesday.

The rising food prices have raised concerns about a return to the political instability of 2008, when Haiti, Kenya and Somalia were among impoverished countries that saw rioting over the cost of living.

This year, a drought in Russia has prompted the country to restrict wheat exports, helping drive up global food costs. The increased prices already have sparked deadly riots in Mozambique and growing anger in Egypt and Serbia, while Pakistan, devastated by floods, has seen many food items jump 15 percent in price.

But the Rome-based Food and Agriculture Organization said in a statement “we don’t believe we are headed for a new food crisis” because this year’s cereal harvest worldwide was the third highest on record and food stocks are high. Other conditions, such as soaring fuel prices, that were blamed for the 2007-2008 food crisis aren’t present now, officials note.

The agency is holding a special session on Sept. 24 to better gauge the food supply situation in member nations, but FAO stressed that the gathering is “not an emergency meeting.”

“There is a lot of uncertainty about the evolving supply and demand situation, and the measures different countries are taking to limit price variability,” the statement quoted a top FAO economic official, Hafez Ghanem, as saying.

“Food commodities markets will remain more volatile in the years ahead,” FAO said. It suggested improving the markets’ regulation and establishing an “appropriate level” of emergency food stocks, while assuring fluid global trade in food.

As for Russia’s export ban on wheat, Ghanem said, “as a general rule, export bans are to be avoided as they create market instability.”