UPDATE 1-Wheat price spike raises food insecurity-UN expert

Published 09/07/2010, 09:45 AM
Updated 09/07/2010, 09:48 AM

* U.N. expert blames trader speculation for costlier food

* Floods in Pakistan, drought in Syria also strain supplies

(Adds comments on Syria hunger, Mozambique on bread prices)

By Laura MacInnis

GENEVA, Sept 7 (Reuters) - Riots over high bread prices in Mozambique and food shortages elsewhere should be a wake-up call for governments which papered over food security problems that arose two years ago, a United Nations expert warned on Tuesday.

Olivier De Schutter, the U.N. special rapporteur on the right to food, said during a mission to Syria that donors had not been delivering on their aid promises and that public anger in countries like Mozambique was predictable.

"Most poor countries are still highly vulnerable," De Schutter said in a statement. "Their food security is excessively dependent on food imports whose prices are increasingly high and volatile."

In Mozambique, 13 people were killed and nearly 150 arrested last week after riots sparked by a 30 percent rise in the price of bread -- a result of soaring global wheat prices.

In response, the government announced on Tuesday that it would reverse the bread price increases, using subsidies to cover the costs.

Egyptians have also protested over food prices and experts have warned that riots could break out elsewhere in Africa and the Middle East, with flooding in Pakistan and fires in Russia raising fears about global supplies.

De Schutter estimated that 2 to 3 million Syrians now face food shortages following four years of severe drought.

Small-scale farmers and herders in Syria have seen their incomes drop as much as 90 percent as a result of the drought, according to the independent expert.

"Many families have had to choose to reduce their food intake: 80 per cent of those affected were reported to live on bread and sugared tea," he said.

Adding to strains from natural disasters, like the floods in Pakistan, De Schutter said commodity traders and investors have skewed food markets with their bets.

"Price increases are exacerbated by speculation from unregulated traders, and they are transmitted directly to households, who often spend 60 to 70 per cent of their incomes on food," he said.

Although the world cereal output in 2010 should still be the third highest on record, fears about future supplies have led the prices of wheat to increase 70 percent on international markets since last year, according to the United Nations.

Much of the recent wheat spike has been linked to drought and fires in Russia, which had been the world's No. 3 wheat exporter, and a decision by the Russian government to extend a grain export ban until late 2011.

The floods in Pakistan -- Asia's third-largest wheat producer -- have destroyed 0.5-0.6 million tonnes of wheat seed stocks and at least 1.3 million hectares of standing crops of maize, rice, sugar cane, cotton, vegetable and fruit orchards, according to partial estimates from the Food and Agriculture Organisation (FAO), a U.N. agency.

De Schutter said overall food prices on international markets have increased by five percent since July. The FAO food price index has hit its highest level since September 2008.

The FAO has called an emergency meeting for Sept. 24 in Rome for governments to confront weaknesses in the global food system and find ways to boost reserves. The U.N. expert said it was critical for donor countries to provide meaningful assistance.

"In 2008, many governments were taken by surprise," he said. "We have today a much better understanding of what needs to be done to realise the right to food." (Additional reporting by Stephanie Nebehay)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.