This was one of the proposals put forward at a day-long meeting of the Inter-Governmental Groups (IGGs) on Grains and on Rice at the UN Food and Agriculture Organization (FAO), held in Rome on 24 September.
Maximo Torero, head of the Markets, Trade and Institutions Division at the International Food Policy Research Institute (IFPRI), a US-based policy think-tank, said similar measures were suggested after the 2007/08 food price crisis had led to price volatility, but not much had been done.
Since July 2010, droughts and fires in Russia, a major wheat producer, have caused global prices to soar by between 60 and 80 percent, while maize has spiked by about 40 percent. The IGGs meeting dealt with these "unexpected" price hikes at length and pronounced that they were "a major threat to food security".
The meeting blamed "national policy responses and speculative behaviour", rather than "global market fundamentals" (global demand and supply of grains), as the major causes of the price hikes.
Basic commodities like grains, sugar and oil experienced boom-times between 2002 and 2008, attracting growing numbers of financial investors to the commodities futures exchange, a move dubbed the "financialization of commodity markets" by the UN Conference on Trade and Development (UNCTAD), an intergovernmental body dealing with trade, investment and development issues.
The IGGs list the impact of financialization of the futures markets - along with poor market transparency, insufficient information about investors, unexpected changes triggered by national food security situations, panic buying and hoarding - among the root causes of harmful, rapid food price hikes. Russia recently announced a ban on exports, which also helped push up prices, economists said.
http://www.irinnews.org/Report.aspx?Reportid=90626
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