SINGAPORE/LONDON
A farmer throws
fertilizer on a rice paddy field in Dong Xung village,
outside
Credit: Reuters/Kham
(Reuters) - Record high food prices are moving to the
top of policymaker agendas, driven by fears it could stoke inflation,
protectionism and unrest and dent consumer
demand in key emerging economies.
The United
Nations' food agency (FAO) said on Wednesday that food prices hit a record high
last month, above 2008 levels when riots broke out in countries as far afield
as
In
President Susilo Yudhoyono Bambang told a cabinet
meeting people should be "creative" in planting, with Trade Minister
Mari Pangestu leading the way in planting at home.
"I have 200 chilli
plants in flowerpots," Pangestu told a briefing
on Thursday. "The agriculture ministry is informing farmers how to take
care of the plant and also encouraging consumers to plant chilli
in their own yards."
Surging
food prices have often provoked unrest in urban areas of poor countries, where food makes up a high
proportion of household purchases.
Analysts
say African and
If Asian
and other emerging consumers have to spend more of their income on food, other purchases will fall
-- and that could be bad news for a global economy that has placed much of its
hopes for recovery on consumption in developing economies.
World Bank President Robert Zoellick
urged governments in a newspaper opinion column to avoid protectionist measures
as food prices rose and called upon the Group of 20 leading economies to take
steps to make sure the poor get adequate food supplies.
French President Nicolas Sarkozy
has asked the World Bank to conduct urgent research on the impact of food
prices ahead of G20 meetings later this year, a source familiar with the matter
said.
INDIAN INTEREST
RATE PRESSURE
Food
price protests were seen a factor in the ousting of Indonesia's long-term
autocrat Suharto in 1998, and anger over a farmland purchased by South Korean
firm Daewoo at a time of rising prices was in part blamed for a 2009 coup in
Madagascar.
The Indian government has used a range of measures
for years to ensure stable food prices, but since last year has boosted the
release of national stocks of grains and has pledged to continue duty-free
imports of crude vegetable oils.
In
The cost of food rose 11.7 percent
in the year to November, while non-food items were up just 1.9 percent. But, reflecting concerns
that inflation is creeping beyond food to the wider economy, consumer goods
prices and housing costs showed clear jumps.
Fu Bingtao, an economist with the Agricultural Bank of China
in Beijing, said in a report the price of grains, the country's most important
food, would rise in 2011 by 10 percent, adding to an 11.7 percent rise in 2010. (Look!!!
–
"Speculative trading and hoarding of specific
agricultural products may continue," he said.