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Export bans would further fuel food crisis

By Laura Crowley , 29-Apr-2008

Countries should not use export bans to cope with the current food crisis as it would place further strains of the global situation, said the World Bank.

The statement was made by Robert Zoellick, the World Bank group president, at a United Nations meeting in Switzerland today, amid increasing concerns on the devastating impact of high food prices and limited food supplies.

 

 

 

Countries, such as India and Indonesia, have blocked rice exports to guarantee domestic supplies remain affordable. However, the World Bank says this has detrimental effects on the food crisis as it "threatens to distort international trade and exacerbate shortages".

 

 

Zoellick said: "We are urging countries not to use export bans. These controls encourage hoarding, drive up prices and hurt the poorest people around the world who are struggling to feed themselves.

 

 

Additionally, such a ban could hinder competitiveness as well as limit ingredients supply in the European market, which currently relies heavily on trade.

 

 

Zoellick added: "Ukraine set a good example last week by lifting restrictions on exports of grains. This had an immediate effect by lowering prices in the markets."

 

 

The World Bank appeal comes the same week the UN agreed to see up a task force to explore both emergency and long-term measures to tackle the food crisis.

 

 

 

Food crisis

 

 

Food prices have been rising over the past few years and have caused increasing concern as poor harvests last year affected stocks; an increasing preference for biofuels, the 'greener alternative', drove up competing demand for corn and other grain supplies; and emerging markets also pushed demand.

 

 

 

At today's UN meeting, Zoellick said: "Though we have seen wheat prices fall over the last few days, rice and corn prices are likely to remain high, and wheat relatively so."

 

 

At the same time, energy costs have increased, with oil prices reaching $120 (€77) per barrel this week.

 

 

 

As well as placing financial pressures on food manufacturers to either swallow soaring ingredients costs while finding alternative, cheaper products to use or to face the consequences of passing on higher costs to their customers, the crisis has pushed millions into poverty.

 

 

 

"For 2bn people, high food prices are now a matter of daily struggle, sacrifice and for too many, even survival," said Zoellick.

 

 

"We estimate that already some 100m people may have been pushed into poverty as a result of high prices over the last two years."

 

 

In addition to the World Bank urging countries to continue with food exports, the group said ministers from over 150 countries endorsed a New Deal for Global Food Policy to develop a short and long term solutions to the problem.

 

 

 

UN task force

 

 

Secretary General Ban Ki-moon said yesterday that the UN will set up a task force to tackle the global food crisis, according to media reports. The group will be made up of heads of UN agencies and the World Bank.

 

 

 

The first priority he said was to meet the World Food Programme's (WFP) call for $755m (€485m) to meet emergency needs.

 

 

 

The World Bank said about $475m (€305m) has already been pledged, but this is insufficient. It has therefore said it will double its lending for agriculture in Africa over the next year to $800m (€514m).

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