Food riots broke out in Maputo, Mozambique, after bread prices rose 30 per cent.
Food prices globally are on an upswing. As Russia extended the wheat export ban till the next year's wheat harvest sending global prices on a hike, deadly food riots were witnessed on Wednesday and Thursday in Mozambique killing at last seven people. According to news reports, anger is building up in Pakistan, Egypt and Serbia over rising prices.
Knowing that the world can witness a repeat of 2008 food crisis that resulted in food riots in 37 countries, the UN FAO has called for a special meeting to discuss the implications.
Extended drought and resulting wildfires has caused a 20 per cent drop in wheat harvest in Russia sending the global wheat prices on a spiral. Wheat futures obviously would take advantage, and according to Financial Times wheat prices have gone up by 70 per cent since January. Prices can rise further on account of an anticipated low harvest in Australia this year.
Although FAO does not anticipate a repeat of the 2008 food crisis since the commodity markets are not being driven by high oil prices this year, there is a legitimate concern hanging in the air. After all, why is the world witnessing food crisis at such a close frequency? Is something going wrong with the way we are managing food supplies? Is the supply chain system that the world has evolved in the past few decades the right way to ensure food security? How long will it take for the UN as well as for the member countries to realise that free trade in agriculture will acerbate the global food crisis, and lead to more hunger and unemployment?
These are some of the questions that international leadership, whether it is in politics, economics or agriculture, needs to urgently address. This is an issue which the G-20 leaders should be more concerned about. I think the time has come when political leadership has to rise to the occasion and come up with sustainable solutions, in the light of global warming, and come up with answers that are sustainable in the long-term, lead to more prosperity on the farm front, and ensures that every country has the ability to feed itself.
This is not an impossible task. All it needs is a fresh look at the way we are managing agriculture. It has to begin with the enshrined principles of food sovereignty. I draw the attention of the political leaders to the report of the International Assessment of Agricultural Knowledge, Science and Technology for Development (IAASTD). It is certainly possible to diminish world hunger and turn the planet food secure. Business as usual will lead to more disasters in the years to come.
Fear Grows Over Global Food Supply
Financial Times, Sept 2:
Wheat prices rose further on Friday in the wake of Russia’s decision to extend its grain export ban by 12 months, raising fears about a return to the food shortages and riots of 2007-08.
In Mozambique, where a 30 per cent rise in bread prices triggered riots on Wednesday and Thursday, the government said seven people had been killed and 288 wounded.
Vladimir Putin’s announcement on Thursday extended an export ban first introduced last month until late December 2011, sending wheat and other cereals prices to a near two-year high. It came as the UN’s Food and Agriculture Organisation called an emergency meeting to discuss the wheat shortage.
In Maputo, trade and industry minister Antonio Fernandes told a national radio station on Friday that the riots had caused 122m meticais ($3.3m) of damage. Police opened fire on demonstrators after thousands turned out to protest against the price hikes, burning tyres and looting food warehouses.
Although agricultural officials and traders insist that wheat and other crop supplies are more abundant than in 2007-08, officials fear the food riots could spread.
Wheat prices remained high on Friday morning. Futures in Chicago were up 1.5 per cent at $6.91 a bushel, while European wheat futures remained at historically high levels above €230 a tonne, just shy of last month’s two-year high of €236. Wheat prices have surged nearly 70 per cent since January, and analysts forecast further rises after Russia’s decision and concerns about weather damage to Australia’s crop.
The crop problems in Russia, which suffered its worst drought on record this summer, and elsewhere, have heaped pressure on US farmers to supply the world’s wheat. The US Department of Agriculture has increased its estimates for US wheat exports to $8bn for the current crop year.
The 2007-08 food shortages, the most severe in 30 years, set off riots in countries from Bangladesh to Mexico, and helped to trigger the collapse of governments in Haiti and Madagascar.
The FAO said that “the concern about a possible repeat of the 2007-08 food crisis” had resulted in “an enormous number” of inquiries from member countries. “The purpose of holding this meeting is for exporting and importing countries to engage.”
Russia is traditionally the world’s fourth-largest wheat exporter, and the export ban has already forced importers in the Middle East and North Africa, the biggest buyers, to seek supplies in Europe and the US.
Mr Putin said Moscow could “only consider lifting the export ban after next year’s crop has been harvested and we have clarity on the grain balances”. He added that the decision to extend the ban was intended to “end unnecessary anxiety and to ensure a stable and predict-able business environment for market participants”.
“This is quite serious,” said Abdolreza Abbassian, of the FAO in Rome. “Two years in a row without Russian exports creates quite a disturbance.” Dan Manternach, chief wheat economist at Doane Agricultural Services in St Louis, added: “This is a wake-up call for importing nations about the reliability of Russia.”
Jakkie Cilliers, director of South Africa’s Institute of Security Studies, said there was concern over a repeat of the protests of 2008: “That certainly strengthened a return of the military in politics in Africa.”