Business World

Friday 22 November 2019

Soaring grain prices alarm G20 nations

Gus Trompiz and Nigel Hunt

Leading members of the Group of 20 nations are prepared to trigger an emergency meeting to tackle soaring grain prices caused by the worst US drought in more than half a century and poor crops from the Black Sea bread basket.

France, the US and G20 president Mexico will hold a conference call at the end of this month to discuss whether an emergency international meeting is required, aiming to avoid a repeat of the food price spike that triggered riots in poorer countries in 2008.

Analysts had little hope of concrete action, although there could be further calls for the US to change its biofuel policy in response to the crisis, while Russia will be encouraged not to impose an export ban.

"Beyond words, expect little from the G20 on rising food prices," said Simon Evenett, a former World Bank official who is now professor of international trade and economic development, University of St Gallen, Switzerland, describing the G20's record on trade as "feeble".

"With a string of broken promises on protectionism, no serious enforcement, monitoring well after the horse has bolted, and a tendency to pull their punches, any G20 promises on food trade won't be taken seriously -- by the G20 themselves or by anyone else."

Benchmark Chicago corn climbed to an all-time high on Friday after the US Department of Agriculture cut its production estimate by 17pc.

The US uses 40pc of its corn crop to produce ethanol, drawing criticism for using food for fuel when hunger is widespread in some poorer countries.

The UN's food agency stepped up pressure on the US on Friday to change its biofuel policies, arguing the importance of growing crops for food over their use for fuel. (Reuters)

Irish Independent

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