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Export bans major cause of food crises

WORLD
By | January 24th 2011

GENEVA, Sunday

Export restrictions are a prime cause of current and recent surges in global food prices, and countries should find other ways to secure domestic supplies, the head of the World Trade Organisation has said.

WTO Director-General Pascal Lamy said only a few years after the 2008 food crisis, rising prices were stoking global inflation and fomenting political unrest in several countries. Two weeks ago, the United Nations Food and Agriculture Organisation (FAO) said its food price index had reached a record high last year, exceeding 2008 levels when rising food prices prompted riots in a number of countries.

Lamy said that one factor this time was bad weather, for instance last year’s drought in Russia and its Black Sea neighbours. But export restrictions played a major role in food crises, and some people considered them the main cause of the 2008 price rise, he told a conference of agriculture ministers in Berlin.

"Export restrictions lead to panic in markets when different actors see prices rising at stellar speed," Lamy said.

For instance, there was no fundamental imbalance in the market for rice in 2007-2008 but international trade in the crop fell by seven per cent in 2008 from record 2007 levels largely because of export restrictions, he said.

Rising prices for cereals in 2010-2011 have much to do with export restrictions in Russia and Ukraine, imposed after both countries were hit by drought, he said.

Such restrictions hurt importing countries and can prevent the World Food Programme from acquiring the food it needs to help starving people.

-—Reuters

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