Famine fears for North Korea

By Jon Herskovitz

SEOUL (Reuters) - The chances of famine in North Korea have increased in line with the soaring price of rice on global markets, a Washington-based institute said on Wednesday.

"The country is in its most precarious situation since the end of the famine a decade ago," said a paper from the Peterson Institute for International Economics.

A jump in prices for foodstuffs has hit many poor nations this year and sparked riots in parts of Africa and Asia. Export restrictions by leading suppliers have fuelled insecurity and market speculation has also pushed prices higher.

The head of a new United Nations task force set up to ensure a coordinated international response to the food crisis said malnutrition was more likely than outright famine in most countries, at least in the near future.

"People, particularly those on the lowest incomes, will be eating less and less well," John Holmes told a news conference in Geneva. "I don't think that in the very short term we are talking about starvation and famine."

Egyptian President Hosni Mubarak proposed a 30 percent increase in the salaries of public sector employees to help cover the increasing cost of food while China urged local authorities to "strictly control" grain exports.

A proposal by Japan to limit restrictions on exports of food got a "cool response" on Wednesday, especially from developing countries, the chairman of the World Trade Organization's (WTO) farm talks, New Zealand's Crawford Falconer, said.

Japan, the world's third biggest food importer, was joined by Switzerland in proposing limits to restrictions on food exports after moves by several countries to ban or tax exports.