World News

France says concerned by surging global food prices

PARIS (Reuters) - France is worried by sharp rises in global food prices, Agriculture Minister Bruno Le Maire said on Tuesday as he called again for stricter regulation to avoid speculation on commodities leading to sharp market swings.

“This is a cause for concern and I think it is urgent to get concrete answers and efficient tools” to avoid market swings, Le Maire told a news conference.

European milling wheat futures almost doubled in 2010 after a series of weather events including a severe drought in Russia and floods in Australia slashed global supply.

The UN Food and Agriculture Organization said last week food prices hit a record high in December and could rise further on erratic global weather patterns.

Le Maire called again for tighter regulation on commodity trading. “The fact that wheat prices rise to 140-150 euros from 110-120 euros because there is less production is just the way the market works and this is not an issue,” he said.

“What we do find problematic on the other hand is that based on this reality a certain number of people come and speculate and push wheat prices to more than 200 euros ($259 per tonne). This is what we find problematic and that’s what we want to fight against.”

French President Nicolas Sarkozy pressed for international efforts to impose greater transparency in commodity markets trading and pricing during a meeting with his U.S. counterpart Barack Obama at the White House on Monday.

Le Maire said the current situation was not as worrying as in 2008 -- when spiralling prices prompted riots in countries including Haiti, Egypt and Cameroon -- thanks to a string of bumper harvests in Africa.

Latin America -- where corn and soybean crops have been stressed by a hot and dry spell that could lead to lower yields -- will be a deciding factor in whether the current situation turns into a repeat of the 2007/2008 slump in harvest.

Australia’s wheat harvest faced further quality downgrades on Tuesday, with torrential rains forecast to hit southern wheat crops, threatening to worsen a global shortage of premium-grade grain.