France and the U.N. food agency FAO warned on Friday about the risk of a new global food crisis and ensuing riots, calling for greater regulation to curb speculation on commodities markets.
The warning came a day after FAO said its global food price index had climbed to a record high in January, increasing for the seventh consecutive month. France holds the Group of Eight and Group of 20 presidencies this year and has made battling high food prices a priority.
We share the same view that today the real risk of a global food crisis exists, French Farm Minister Bruno Le Maire said at a joint news conference with the head of FAO, Jacques Diouf.
Surging food prices have come back into the spotlight after they helped fuel protests that toppled Tunisia's president in January and have spilt over to Egypt and Jordan. This has raised speculation other countries in the region would secure grain stocks to reassure their populations.
Without naming countries, Le Maire and Diouf spelled out the risk that rising prices would fuel more food riots, calling for structural measures -- including increased market regulation -- to curb price volatility.
France and FAO have blamed financial speculation in commodity markets for contributing to soaring prices.
France has put the issue of volatile food prices high on the G20 agenda and has called a meeting of G20 agriculture ministers in June in Paris to discuss concrete measures.
Le Maire reiterated France's view that more transparency in commodities stocks, better coordination between G20 states to avoid unilateral measures such as export curbs and market rules to fight speculation in commodity derivatives were key.
Regulation does not mean fighting against markets, but improving the way in which markets function, he said, without elaborating on the concrete details.
France is expected to propose position limits, identifying commodity players as either speculative or commercial, and seeking a framework to record over-the-counter trades.
However, there are stark differences among producing and consuming countries over new global regulations, or over the degree to which hedge funds and other financial investors have inflated food prices.
France is also focussing on improving the transparency of global commodity supplies. It wants to see an agriculture database similar to the Joint Oil Data Initiative, which gathers oil data. Le Maire said reliable information about production and stocks in particular was crucial.
However analysts say that is also a difficult target because countries may not be inclined to divulge information about, for example, their strategic reserves or have the infrastructure in place to collect reliable data from their farmers