Nations turn to barter deals to secure
food
By Javier Blas in
Published: January 26 2009 23:32
| Last updated: January 26 2009 23:32
Countries struggling to secure credit have resorted to
barter and secretive government-to-government deals to buy food, with some
contracts worth hundreds of millions of dollars.
In a striking example of how the global financial crisis
and high food prices have strained the finances of poor and middle-income
nations, countries including
The revival of these trade practices, used rarely in the
last 20 years and usually by nations subject to international embargoes and the
old communist bloc, is a result of the countries’ failure to secure trade
financing as bank lending has dried up.
The countries have not disclosed the value of any deals,
and some have refused even to confirm their existence. Officials estimated that
they ranged from $5m for smaller contracts to more than $500m for the biggest.
Josette Sheeran, head of the United Nations’ World Food Programme, said senior government officials, including
heads of state, had told the WFP they were facing “difficulties” obtaining
credit to purchase food. “This could be a big problem,” she told the Financial
Times.
Last week,
“[Bartering] could be used for contracts with other
countries that do not have the cash,” Mr Chin told
the local press. “We can set the conditions for them to supply us with the raw
materials that we need.”
The countries’ struggle to obtain credit to import food
is boosting the price of domestic crops. Ms Sheeran
said that prices of crops in some African countries were rising sharply even as
international food commodities prices had fallen from last summer.
The move to barter shows the global food crisis that
started last year is far from over.