Weak dollar, hot money cause of high food prices: FAO
Source: ABS-CBN News http://www.abs-cbnnews.com/storypage.aspx?StoryId=114715
BRASILIA – Global investment funds and the weak dollar are largely to blame for high world food prices, a senior official of the United Nation’s Food and Agriculture Organization said on Thursday.
“The crisis is a speculative attack and it will last,” said Jose Graziano, the UN food and farm organization’s regional representative for Latin America and the Caribbean.
“This is not a conspiracy theory,” he said.
Across the globe foods from bread to milk have become more expensive and in some countries helped fuel inflation. High prices for rice, beans and other food staples provoked food riots in Haiti this week.
“The lack of confidence in the (U.S.) dollar has led investment funds to look for higher returns in commodities … first metals and then foods,” Graziano told a news conference in the capital.
Investors have speculated in commodities including wheat, corn and rice because stocks in recent years have been drawn down by rising demand in emerging markets and supply shortages due to adverse climate in key producer nations, Graziano said.
“Speculative attacks become possible when you have low reserves,” Graziano said.
Stocks of some food crops have fallen to their lowest levels in three decades, according to Brazilian farm experts.
Brasilia will host an FAO conference next week, which will focus on food shortages in Haiti, biofuels and small farms.
The FAO will in next week’s meeting propose initiatives to help combat the current global food shortage, including incentives for small farmers.
Brazil is one of the world’s leading food exporters.