Nestle boss worried by volatile food prices

26th January 2011, Comments 0 comments

The head of Swiss food giant Nestle said Wednesday he was concerned about the recent volatility of food prices, although he dismissed the possibility of a crisis.

Speaking on the sidelines of the annual meeting of the World Economic Forum, Paul Bulcke told AFP: "The underlining trend is upward, which is not bad. It incentivises ... agriculture."

"But we'll have to work on the volatility, which is not good," he added.

A recent spike in commodity prices has raised the spectre of social and political turmoil amid riots in Algeria over rising costs.

In its most recent forecast, the International Monetary Fund cited high food prices as a major downside risk to the global economy.

And at a meeting of agriculture ministers from Europe, Africa and Canada, officials warned of riots and unrest unless swift action is taken to improve security and battle rising food prices.

French President Nicolas Sarkozy has placed the issue on the agenda for his country's presidency of the G20.

Abdolreza Abbassian, an economist at the UN's Food and Agriculture Organisation (FAO), told AFP earlier this month that surging prices for cooking oil, cereal and sugar in particular, "will affect millions of people."

And the issue is emerging as one of the dominant themes at the Davos gathering of political and business elites.

"The rise in food prices is becoming a serious political and social problem," New York University professor Nouriel Roubini told the opening panel earlier Wednesday.

© 2011 AFP

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