Times 2

G20 to tackle food prices as countries reassure

SEOUL, Jan 8, (Reuters)- The world's biggest economies are working to find ways to bring down soaring food prices, a G20 official said on Friday, as top exporter Thailand vowed to keep rice supply steady and avert a repeat of the 2008 food crisis.

Global food prices hit a record high last month, outstripping the levels that sparked riots in several countries in 2008, and key grains could rise further, the United Nations' food agency said this week. Policymakers are concerned that, if unchecked, rising food prices could stoke inflation, protectionism and unrest.

High food prices and unemployment were blamed for a second day of rioting in Algeria Friday with police deployed around mosques and authorities suspending football matches. Rhee Chang-yong, who represents South Korea at the G20, said working-group talks were under way aimed at improving global cooperation to resolve food security problems.

“France is emphasising food security. As a former hos country of G20, we would like to deal with the price volatility problem thoroughly,” Rhee said. French President Nicolas Sarkozy has asked the World Bank to conduct urgent research on the impact of food prices, a source familiar with the matter said.

French Prime Minister Francois Fillon said this week that one of France's priorities at the G20, where it holds the rotating presidency, was to find a collective response to “excessive volatility” in prices of food and energy.

One concern is that high food prices could hit consumer spending in fast-growing emerging countries that are leading the revival of the global economy. Last year, wheat futures prices rose 47 percent, buoyed by bad weather including drought in Russia and its Black Sea neighbors. U.S. corn rose more than 50 percent and U.S. soybeans jumped 34 percent.

Many countries, including Brazil, India and China, have seen food inflation jump to double digit levels. Inflation rates accelerated across Latin America in December as costs spiked for food, increasing pressure on policymakers to raise interest rates.

Thailand, the world's biggest rice exporter, sought to reassure the market, with Commerce Minister Porntiva Nakasai telling reporters it would maintain 2011 exports at 9 to 9.5 million tonnes after shipping 9 million in 2010.

The Philippines, the world's biggest buyer of rice, said it would cut its 2011 imports by at least half, compared with record purchases in 2010, further easing concerns of a tight rice market this year.
A senior food official in Bangladesh said it was worried about food security and had imported 250,000 tonnes of rice from Vietnam.

In Indonesia, which has the world's fourth-largest population, a fivefold rise in the price of chillies in the past year has helped drive overall inflation to near 7 percent. In India, where onion prices have triggered protests in the past, prices have jumped after weather damaged the crop and officials have opened talks with Pakistan about resuming imports.

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