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Food prices to remain high: FAO

Last updated on: April 09, 2008 16:13 IST
The United Nations' Food and Agriculture Organisation on Wednesday said global commodity prices were far from easing in the short term owing to tight supply-demand situation and warned of flare ups over food shortage.

"The rise in prices of food commodities all over the world, is not going to ease in the short term in view of supply-demand situation," Jacques Diouf, director general, FAO said after meeting agriculture minister Sharad Pawar.

The UN FAO director general said the world has 405 million tonnes (MT) of cereals stocks that can feed the global population for only 8-12 weeks.

"The world food situation is very serious today with food riots reported from many countries like Egypt, Cameroon, Haiti, Burkina Faso and Senegal. We fear that this may spread to other countries," he added.

Diouf noted that people in the developing countries spend 50-60 per cent of their income on food and therefore any rise in the food prices affects them.

He attributed increasing demand from the developing countries, particularly in China and India, and diversion of food grains towards production of bio-fuels for rising commodity prices across the world. However, Pawar expressed confidence that India's food situation is comfortable with sufficient stock.

"We have over half a million tons of food grain surplus than the buffer norms as on April 1 this year," Pawar said.

According to Food Corporation of India, the wheat stock as on April 1 is 5.5 MT against the buffer norm of 4 MT. Diouf informed that FAO has called an emergency meeting of head of states during June 3-5, 2008 to discuss the overall situation including impact of climate change.

The FAO Director General said the meet will also discuss whether to stop biofuel production in the developed countries which are diverting foodgrains to make ethanol.

Without naming the US, Diouf said currently 100 million tonnes of cereals are being diverted for biofuel production in one country and the quantity is estimated to increase 12-fold by 2017.

He said the world grain situation is at its lowest since 1980s. "The situation (food shortages) is due to a structural problem and a decision requires to be taken at the structural level across the world."

The rising income level of people in developing economies like China and India is an important factor in driving up the food demand. The supply of foodgrains has been affected by drought in Australia and Kazakhstan, flood in India and Bangladesh, cold temperature in China, besides climate change.

When asked for his suggestion to improve the overall situation, Diouf said it is essentially to increase food production through raising productivity level of crops, investment in rural areas and better water management.

When asked his views about GM crops to increase production, he said the member countries are divided on the issue. So far as GM issue is concerned, FAO follows the WHO and Codex standards of food products.

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