'G20 to consider action on food prices'
G20 nations will decide in October if it should take joint action on global grains prices.
LONDON - Group of 20 nations will decide next month whether to take joint action on soaring global grains prices, Russia said on Thursday, but analysts doubted they can cool markets which are close to levels that provoked food riots four years ago.
A charity demanded urgent action to protect the world's hungry as harvests fall short of needs for the coming year, and the U.N. Food and Agriculture Organization (FAO) called on nations to calm markets, although it played down talk of a new crisis.
Markets themselves were sceptical about what the G20, which comprises wealthy nations and leading emerging economies, could achieve as exports from major grains producers Ukraine and Russia may be limited.
Russian Deputy Agriculture Minister Ilya Shestakov said that senior G20 officials would tackle the problem in the Rapid Response Forum, which was created last year.
"At the beginning or mid October, Russian representatives will take part in the rapid response forum, which was set up within G20 to discuss food market issues," he told a grains conference in Moscow.
"We are not planning any emergency measures, we want to carry out analysis, discuss possible scenarios and our joint actions to calm down the market," he said. "We will take the decision on whether joint actions are needed."
France, which presides over the G20 agriculture body AMIS, had said any decision on convening the forum would be made after a U.S. government report on grains due on September 12. French officials declined immediate comment on Shestakov's remarks.
The worst U.S. drought in more than half a century and poor crops from the Black Sea bread basket pushed grain prices to record levels this summer, raising the chance of a repeat of the crisis four years ago that provoked riots around the world.
Analysts were doubtful about what the G20 could do to curb runaway markets. "So far all the G20 succeeded in doing is to create a new bureaucracy above other bureaucracies, that can do nothing and will do nothing," said James Dunsterville, analyst at Geneva-based Agrinews consultancy.
THIRD SURGE IN FOUR YEARS
The third global food price surge in four years has revived memories of the 2007/2008 crisis which the FAO estimated added 75 million to the number of chronically hungry people in the world. Other estimates put the increase at up to 160 million.
"Food prices remain at peak levels and governments cannot turn their backs on the need to take action," the charity Oxfam said in a statement. "The G20 wants to wait for U.S. crop results before acting when it's clear that prices remain high and millions of people cannot afford to eat."
The FAO said on Thursday that the U.S. drought would lead to a larger-than-expected drawdown in global grain stocks.
"Although we should remain vigilant, current prices do not justify talk of a world food crisis. But the international community can and should move to calm markets further," FAO Director-General Jose Graziano da Silva said in a statement.
The FAO Food Price Index, which measures monthly price changes for a food basket of cereals, oilseeds, dairy products, meat and sugar, averaged 213 points in August, unchanged from July, FAO said in its monthly update.
Although the index was below a peak of 238 points in February 2011 - when high food prices helped to drive the Arab Spring uprisings in the Middle East and North Africa - it is still close to levels during the 2008 crisis.
The U.S. Midwest, the world's most important producing region for maize and soybeans, has suffered its worst drought in 56 years, while traders have also warned that Russia and Ukraine could soon exhaust stocks of exportable grain as major importers look to secure supplies.
"Ukrainian and Russian wheat is pouring into export markets like an avalanche and will sell out very quickly unless something is done," one European trader said.