WTO says cannot solve food price crisis

By Jonathan Lynn

GENEVA (Reuters) - The World Trade Organization cannot conjure up a short-term solution to soaring food prices but a successful end to global trade talks would help in the longer term, the organization's chief said on Wednesday.

Staple food prices have risen more than 40 percent in the last year causing shortages, hoarding and riots in many developing countries and prompting the United Nations to warn of malnutrition and social unrest.

WTO chief Pascal Lamy said a deal in the Doha round of trade talks would help soften the impact of high prices by lowering barriers to trade in agricultural products, including subsidies in rich countries.

"Although the WTO cannot provide anything immediate to help solve the current crisis, it can, through the Doha Round negotiations, provide medium to long-term solutions," Lamy said.

To meet its goal of concluding the long-running talks this year, the WTO needs a breakthrough within weeks, Lamy told the WTO's policy-making general council.

"As you are all aware, the overall outcome would be less distortion in world markets and increased international trade, leading to more rapid and efficient adjustment by supply to changes in demand," he said.

Many countries have responded to the high prices by imposing taxes and other restrictions on exports -- allowed under WTO rules -- to try to ensure adequate supplies at home.

Bangladesh said on Wednesday it had banned exports of non-aromatic rice for six months to secure domestic supplies.