FAO: No Food Crisis But Market Stability Needed

The international community needs to develop appropriate ways of dealing with the volatility of food commodities markets. The G20 could take the lead to ensure greater market stability over the medium and long term says Hafez Ghanem, Assistant Director-General for Economic and Social Development of the Food and Agriculture Organization (FAO). Areas for discussion would be improved regulation of markets, greater market transparency, and establishing an appropriate level of emergency stocks.

Ghanem explained that while the market fundamentals are sound, the world is not headed for a new food crisis. "As regards the overall supply and demand situation there's no cause to worry. The picture could, however, change if there is another shock to supply, for example due to more bad weather, or if government policies lead to increased anxiety in the market, provoking panic buying," he added.

The FAO official suggested the need to tighten the regulatory framework in futures markets to limit any adverse impacts from speculation while at the same time enhancing the transparency of such markets.

See the FAO press release at http://www.fao.org/news/story/en/item/45178/icode/