October 12, 2010

Global grain prices fall short of 2008 peaks

International prices of wheat, corn and rice have remained well below their 2008 peak levels despite strong rises this summer after a grain export ban in drought-hit Russia, the United Nations (UN)' food agency said.

Soaring grain prices since July have sparked concerns about the possible repeat of the 2008 food crisis with food riots in developing countries and panic buying in wealthier nations.

In early October, international wheat prices were 40% higher than a year earlier but remained 42% below their peak of 2008, according to the Food and Agriculture Organisation (FAO).

The report comes just as a five-day high-level intergovernmental meeting of the UN's reformed Committee on World Food Security (CFS) starts in Rome aiming to work out a common approach to ensuring global food security.

World corn prices in early October were 31% higher than a year ago but still 24% lower than the peak June 2008 level, and rice prices were 47% below their peaks of mid-2008, the Rome-based FAO said.

However, grain prices were high for many import-dependent countries in Africa and Asia where cereals are main staple foods and where the impact on consumers would depend on government policies in place in individual countries, it said.

For instance, the cost of a government bread subsidy programme in Egypt, the world's biggest importer of wheat, will be seriously affected, the FAO said.

In flood-hit Pakistan wheat prices rose moderately in September, with more significant rises in wheat flour than in grain because of strong demand from Afghanistan, it said.

The CFS meeting participants would look into key issues related to food security, such as land tenure and international investment in agriculture, food security in protracted crises and risk management, it said in a separate statement.