TOKYO, Jan 25 (Reuters) - The head of the United Nations’ food agency has warned that the world is closer to another food crisis and called for rules over speculative moves in commodity futures markets, the Nikkei business daily said on Tuesday.
The Food and Agriculture Organization (FAO) released a report this month in which it said its global price index hit a record high in December, raising concerns about a food crisis as seen in 2008 when soaring prices sparked riots in several countries, high inflation and in some cases deep trade deficits.
“Higher prices and volatility will continue in the next years if we fail to tackle the structural causes of imbalances in the international agricultural system,” Jacques Diouf, director-general of FAO, said in a contribution to the Nikkei.
There is “a pressing need for new measures of transparency and regulation to deal with speculation on agricultural commodity futures markets,” the Nikkei quoted Diouf as saying.
He blamed trade barriers in advanced economies as distorting the supply and demand balance and warned of possible political instabilities stemming from a food crisis, the Nikkei said.
The surge in agricultural markets such as wheat and sugar has fuelled protests in parts of North Africa and the Middle East.
Diouf also said that $44 billion in official development aid in agriculture is necessary and that private investment should increase by $60 billion to $200 billion a year to feed the world’s growing population, the Nikkei reported.
Severe weather and natural disasters have hit key grain-producing countries including Russia and Australia, stoking supply shortage fears as demand from emerging nations such as China and India grows.
The FAO report released this month showed that sugar and meat were at record highs and its cereals index, which includes staples such as wheat, rice and corn, rose to its highest level since August 2008. (Reporting by Yoko Kubota; Editing by Chris Gallagher)