ABU DHABI – Surging global prices of basic foodstuffs raise the risk that the food crisis of 2007-2008 in developing countries will be repeated, the head of the UN’s Food and Agriculture Organization said on Monday. A jump in oil prices and the fast recent drawdown in global stocks of cereals could herald a supply crisis, FAO Director General Jacques Diouf told Reuters in an interview during a visit to the United Arab Emirates. “The high prices raise concern and we’ve been quickly drawing down stocks,” he said.
“For years we have warned that what is needed is more productivity and investment in agriculture.” February’s UN Food Price Index rose for the eighth consecutive month, to the highest levels since at least 1990. Every commodity group except sugar rose last month. Diouf said until recent months, global stocks of cereals were at much healthier levels than the dwindling supplies that set off a crisis in 2007 and 2008. Last July, inventory levels were a full 100 million tonnes higher than during 2007, but rapid economic growth in developing countries, and a return to growth in highly industrialized economies, has led to new drawdowns.
A number of countries in North Africa and the Middle East have made big grain purchases to head off the sort of unrest, partly fuelled by food prices, which has toppled the leaders of Tunisia and Egypt. South Korea is looking to build a strategic grain reserve and is planning to buy cargoes of corn and another staples, joining similar efforts by other Asian nations worried about high food prices and social unrest.
