Spiralling food prices on G8 summit agenda

JAPAN: Leaders of the Group of Eight industrial nations meet in Japan on July 7-9 amid concerns about spiralling food costs around the globe.

Up to 105 million people could become poor due to rising food prices, the World Bank estimates, with forecasters warning prices will remain high for some years.

Factors behind the surge in prices include high energy and fertiliser prices, a declining U.S. dollar, drought in big producing countries including Australia, rising demand from fast-growing economies such as China and India, high oil prices that have pushed up production costs, and dwindling stocks, Rising investment inflows in food commodity futures markets and hedge fund activity have hiked prices further.

Experts have also blamed a big push in biofuels programmes that has diverted land and crops from food production.

Export restrictions imposed by countries including India and China on rice, and by Argentina, Kazakhstan and Russia on wheat, have cut international supplies.

Actions by large rice importers, such as the Philippines, in floating large tenders to obtain needed rice imports, have boosted prices.

Production is increasing but so is demand. The U.N.’s Food and Agriculture Organisation (FAO) has forecast total grain stocks will sink to a 25-year low by the end of this year.

Reuters