UN agency convenes special meeting to examine turmoil in wheat markets

The United Nations Food and Agriculture Organization (FAO) will hold a special meeting later this month to examine the recent spike in wheat prices and help avoid any repeat of the recent global food crisis.

The meeting, slated for 24 September at FAO headquarters in Rome, will bring together experts and government representatives to consider how to ease the current turmoil in grain markets and what role should the UN agency in handling the situation.

Wheat prices experienced their biggest monthly rise in almost a year in August, according to the FAO’s Food Price Index, climbing by 5 per cent following persistent drought in Russia – a major producer – and that country’s subsequent restriction on sales.

Higher sugar and oilseed prices also contributed to the price spike, which has flowed into overall international food prices as well.

Rising food prices reportedly led to deadly protests this week in Mozambique’s capital, Maputo, and led to concerns about a potential repeat of the food crisis in 2007-08. Russia has also extended a ban on wheat exports into 2011 following the drought in its grain-producing regions.

David Dawe, a senior economist at FAO, said today that while the recent turmoil is cause for concern, the so-called fundamentals of the wheat market are far more solid than they were before the food crisis.

“The reaction in the wheat markets is a bit overdone – maybe even substantially overdone,” he told the UN News Centre.

Wheat stockpiles are higher than before, he noted, while overall crop production levels are historically high, even if they have slipped from recent peaks.

“There is uncertainty out there; agriculture markets are always uncertain because of the weather… But it would be premature to think that the situation would get worse.”