G20 ready to meet over grains crisis

The G20 will wait for the next United States crop report — due September 12 — before deciding whether to call a meeting to discuss joint action for combating the current high cereal prices.

The United States and current holders of the G20 presidency Mexico, together with officials from the World Bank, United Nations and the Organisation for Economic Cooperation and Development, held a video conference this week to discuss the rise in maize and wheat prices.

Drought-hit United States is suffering its worst maize yields in 17 years.

Paris and Washington have already said they are prepared to propose the first meeting of the G20’s new Rapid Response Forum, which was created last year alongside the Agricultural Market Information System.

Both tools are currently overseen by France, but the United States is set to take control from October.

According to France, the market situation is worrying «but currently world food security is not threatened».

G20 officials have stressed that talks have focussed on the need to avoid export restrictions and measures that distort the balance of supply, after protectionist moves by a number of countries in 2007-2008worsened the food price spike that provoked riots across the globe.

The World Bank has added its warning against restrictive «panic» trade policies, while its monthly price index this week showed a 10 percent hike in July on the previous month.

Elsewhere, Russia’s government calmed market fears after a meeting of top agriculture officials concluded that grain export limits would not be imposed.

The prices of internationally traded maize and soybeans reached all-time peaks in July. Wheat prices have also soared to levels comparable to the 2011 peaks but below all-time records.

The abrupt food price increases turned favorable price prospects for the year upside down.

World Bank experts do not currently foresee a repeat of 2008. However negative factors — such as exporters pursuing panic policies, a severe el Niño, disappointing southern hemisphere crops, or strong increases in energy prices — could cause significant further grain price hikes such as those experienced four years ago.