FAO calls special meeting on food market tensions

3rd September 2010, Comments 0 comments

The UN's food and agriculture body on Friday called a special meeting to address growing tensions on the food markets, as Russia prolonged a wheat export ban and food riots broke out in Mozambique.

But the Food and Agricultural Organization (FAO) said the September 24 gathering was not an emergency meeting and dismissed any comparison with the situation in 2007-2008.

During that period, food shortages and the resulting price rises sparked riots throughout the developing world.

"The fundamentals are right, they are not those before the crisis in 2007 and 2008," an FAO official insisted.

"There are plenty of stocks and prices are below the peaks of 2008. But there is lots of turmoil."

Abdolreza Abbassian, an economist and grain analyst at FAO said although the organisation did not fear a new crisis, "there is already some anxiety on the markets."

Russia's announcement "will prolong anxiety and volatility," he added.

Prime Minister Vladimir Putin said Thursday that Russia, a major world producer, would not lift a ban on grain exports before next year's harvest.

That extended the embargo until at least mid-2011 after a record drought destroyed a quarter of Russia's harvest.

In Mozambique meanwhile, seven people were killed and 288 injured during riots Wednesday and Thursday over rising bread and fuel prices in and around Maputo, the capital of the country.

The price of bread has risen 17 percent, increasing pressure on struggling households in a country with a per-capita income of just 794 dollars (620 euros) a year.

© 2010 AFP

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