Agriculture Ministers Seek End to Price Manipulation

Agriculture ministers gathered in Berlin said they were “concerned that excessive price volatility and speculation” in international markets for agricultural commodities may threaten the security of the world’s food supply.

The ministers from 48 countries called on the G-20 nations to “fight the abuse and manipulation of prices” in agricultural markets, according to a joint statement handed out at a press conference in the German capital today.

France presides over the Group of 20 this year, and the country’s agriculture minister, Bruno Le Maire, has said world agricultural markets require more regulation. German farm minister Ilse Aigner, who hosted the meeting, said today that price and position limits should be among measures considered.

“All the member countries in the G-20 have to oppose this price volatility,” Le Maire said in a press conference. “With this text we already have a good starting point.”

World food prices rose to a record in December on higher costs for sugar, grain and oilseeds, the United Nations reported Jan. 4. An index of 55 food commodities tracked by the UN’s Food and Agriculture Organization gained for a sixth month to 214.7 points, above the previous high of 213.5 in June 2008.

The rising cost of food helped provoke deadly riots this year in Algeria and Tunisia, and at least 13 people died in Mozambique last year in protests against plans to increase bread prices. Surging food prices in 2008 sparked protests and riots in more than 30 countries, including Egypt, Haiti and Cameroon.

Expanding Population

Global food production will have to rise 70 percent by 2050 as the world population expands to 9.1 billion from about 6.8 billion in 2010, according to the FAO.

Investment in agriculture needs to be increased, the ministers said in today’s statement. With resources scarce and risk related to climate change on the rise, global food security requires “an integrated and sustainable approach” to develop agriculture and rural areas, they said.

The agriculture ministers who gathered in Berlin, including officials from Brazil, Canada and Russia, said they’re considering “reinforcing the importance of risk-protection measures,” according to the statement.

Ukraine’s Agriculture Minister Mykola Prysyazhnyuk, who attended today’s meeting, said the World Bank and other global institutions should create a global grain reserve to smooth out price swings, adding his country would be willing to “actively participate.”

Export Limits

Ukraine imposed grain-export limits in October to keep domestic food and animal-feed prices in check after drought damaged its crop and Russia’s.

France plans to host the G-20 agriculture ministers in Paris in May or June, and Le Maire said he’ll work with countries including the U.S., China, Brazil and Canada to have “concrete solutions” by the end of the year. The French minister has said the world “urgently” needs tools to tackle speculation in agricultural goods.

Prices of major food commodities other than cocoa have advanced in the past 12 months. Paris milling wheat jumped 85 percent, while Chicago-traded wheat climbed 65 percent and corn rose 77 percent. Raw sugar prices have gained 10 percent in New York.

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