MercoPress. South Atlantic News Agency

WTO has no short term solution to soaring food prices

The World Trade Organisation cannot deliver a short-term solution to soaring food prices but a successful end to global trade talks would help in the longer term, WTO chief said on Wednesday.

Staple food prices have risen more than 40% in the last year causing shortages, hoarding, export bans and riots in many developing countries and prompting the United Nations to warn of malnutrition and social unrest. WTO chief Pascal Lamy in his report to the General Council said a deal in the Doha round of trade talks would help soften the impact of high prices by lowering barriers to trade in agricultural products, including subsidies in rich countries. "Although the WTO cannot provide anything immediate to help solve the current crisis, it can, through the Doha Round negotiations, provide medium to long-term solutions," Lamy said. "The reasons why we must conclude the round this year, are visible to all of us and they are becoming more critical by the day". He added "WTO can provide part of the solution" to the current food crisis, "which is why it can, and must, play its full part in this vital effort". To meet its goal of concluding the long-running talks this year, the WTO needs a breakthrough within weeks, Lamy told the WTO's policy-making general council. "As you are all aware, the overall outcome would be less distortion in world markets and increased international trade, leading to more rapid and efficient adjustment by supply to changes in demand," he said. Many countries have responded to the high prices by imposing taxes and other restrictions on exports -- allowed under WTO rules -- to try to ensure adequate supplies at home. Bangladesh said on Wednesday it had banned exports of non-aromatic rice for six months to secure domestic supplies. Export bans by India, Vietnam and Bangladesh in addition to dwindling world stocks have helped rice prices in Asia to treble this year. Rice prices have retreated from the record levels they reached last month but the US futures market rose more than 2 percent because of concern that the cyclone in Myanmar, which killed at least 22,500 people, could further squeeze supplies. Thailand, (world's main exporter), prices eased around 10% earlier this week from a record level above 1,000 US dollars a ton. Director-General Pascal Lamy, in his report to the General Council on 7 May 2008, said "the reasons why we must conclude the Round this year are visible to all of us and they are becoming more critical by the day". He said "the WTO can provide part of the solution" to the current food crisis, "which is why it can, and must, play its full part in this vital effort".