WASHINGTON/PARIS (Reuters) - As U.S. rice futures marched to another record, the U.N.’s Food and Agriculture Organization exhorted farmers and governments to ensure this year’s crop is a success in order to ease the growing food crisis.
Increased demand from rapidly developing nations such as China, the use of crops for biofuels, global stocks at 25-year lows and market speculation are blamed for pushing prices of wheat, corn and rice to record highs.
That in turn has sparked food riots in several African countries, Indonesia and Haiti. The FAO has said 37 countries face food crises but Director General Jacques Diouf on Wednesday said solutions were available.
“This is not Greek tragedy where fate is decided by the gods and humans can do nothing about it. No, we have the ability to influence our futures,” he told a news conference in Paris.
“It’s a good thing that international institutions ... are helping the poor gain access to food, but on our side we need to fight the most important battle today which is to ensure the 2008 farming season is a success.”
In Tokyo, EU Trade Commissioner Peter Mandelson said the World Trade Organization should pressure food-producing countries to maintain exports. Some nations have banned exports in an attempt to avert domestic shortages.
“If we restrict trade, we’re simply going to add food scarcity to the already large problems of food shortages that exist in different countries,” Mandelson said in an interview.
“The WTO stands for free trade. It needs to exert its pressure and influence to reduce tariffs and thereby encourage trade. It’s also got to stand up against export restrictions, export taxes, which too will stop the free flow of trade in foodstuffs and agricultural produce.”
Prices of rice, a staple in most of Asia, have risen 68 percent since the start of 2008.
In Chicago, July rough rice futures soared 2.3 percent on Wednesday to a record $24.85 per hundredweight.
“Some of the main rice producing countries have imposed export curbs ... and this has combined with low global stocks to drive rice higher,” said Kenji Kobayashi, a grains analyst at Kanetsu Asset Management in Tokyo.
In the latest sign that fears of a rice shortage are rippling around the world, Wal-Mart Stores Inc’s Sam’s Club warehouse said on Wednesday it was limiting sales of several types of rice.
On Tuesday, Costco Wholesale Corp, the largest U.S. warehouse club operator, said it has seen increased demand for rice and flour as worried customers stock up.
Trade bans on rice have been imposed by India, the world’s second-largest exporter in 2007, and Vietnam, the third-biggest, in hopes of cooling domestic prices.
In Thailand, the world’s largest rice exporter, farmers have planted a rare third crop and are expected to reap another 1.6 million tons of rice paddy this year.
Diouf said the Rome-based FAO had been signaling the dangers for years. “The situation we are in is the result of inappropriate policies over the past 20 years. Between 1990 and 2000 we lowered food aid for agriculture by half.”
Generous farm subsidies in wealthy countries had also discouraged agriculture in the developing world, he said.
“We have lacked two things: the political will and resources. I hope that this current crisis will give us the political will and the resources to do things.”
Mandelson said concerns over food and global financial turmoil were spurring progress in the Doha round of WTO talks to liberalize world trade. The next ministerial meeting on the Doha round may be held in late May or June.
Already one of the poorest countries in the world, Afghanistan has been struggling to cope with higher prices.
President Hamid Karzai’s government has allocated $50 million to buy food from neighbors, a spokesman said.
But many Afghans were unmoved and blamed the government. “What should we eat? How can a poor man afford to buy food?” asked Kamaluddin Khan, out shopping in Kabul on Wednesday. “Mr. Karzai sits in his palace and doesn’t know what is going on.”
Additional reporting by Isabel Reynolds and Miho Yoshikawa in Tokyo, Nigel Hunt in London and Apornrath Phoonphongphiphat in Bangkok, Jon Hemming in Kabul; editing by Matthew Lewis