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  • From: "Tradingpost" <tradingpost@lobo.net>
  • To: livingontheland@lists.ibiblio.org
  • Subject: [Livingontheland] World Bank warns on food-price rise
  • Date: Fri, 08 Oct 2010 22:26:58 -0600


We said it months ago.
~~~~~~~~~~~~~~~~~

World Bank warns on food-price rise
October 5, 2010
http://www.smh.com.au/business/world-business/world-bank-warns-on-foodprice-rise-20101005-164pl.html

Recent rises in food prices are once again weighing on some developing
nations amid growing global currency frictions, World Bank president Robert
Zoellick said on Monday.

‘‘For many developing countries, the food crisis of 2008 has never gone away.
And recent prices are a serious cause for concern,’’ Zoellick said.

Zoellick said the 187-nation development lender had reinstated a fast-track
financial aid program it had used to help nations cope with the 2007-2008
food crisis that wiped out years of development gains.

‘‘The rise in wheat prices over the last few months is affecting the price of
other staples due to the increased demand for substitutes,’’ Zoellick said in
a briefing ahead of annual meetings of the World Bank and the

International Monetary Fund in Washington set to open on Friday.

‘‘So we’ll have to find a way to avoid food crises becoming the new normal.’’

Since July, international wheat prices have soared 60-80 per cent and maize
rose about 40 per cent, according to recent UN Food and Agriculture
Organization figures.

Zoellick noted the gap between slow economic growth in the developed world
and fast growth in developing countries was causing distortions in global
financial markets.

‘‘You’ve heard the warnings of currency wars,’’ he said.

‘‘Money is chasing yield, it can’t find those yields in developed economies
and this is not only pushing up currency values in emerging and developing
countries, it’s also pushing up the price of some assets with the risk of
bubbles in property and some commodities.’’

Zoellick said he did not foresee the world moving into an ‘‘era’’ of currency
wars, but noted the tensions add to the ‘‘overall sensitivity’’ as the global
economy recovers from the worst recession since World War II.

Meanwhile, the largest international group of financial institutions urged
major economies to take steps to improve policy co-operation, and decried
what it saw as rising unilateralism that threatens global stability.

The Institute of International Finance, which groups the major banks of 70
countries, said urgent action was needed to broker agreements on
macroeconomic and exchange-rate issues.

‘‘As countries struggle to cope individually with the lack of upward momentum
in global growth -- and in many cases unacceptably high unemployment --
urgent action is needed to arrest the disturbing trend towards unilateral
moves on macroeconomic, trade and currency issues,’’ the IIF said in a letter
to finance chiefs who will be meeting this week as part of the IMF’s
International Monetary and Finance Committee.

‘‘Today, these are more pressing than ever issues,’’ Charles Dallara, the IIF
managing director said.

‘‘You see that in 2010, US, Japanese and Chinese imbalances on the current
account have all moved again in the wrong direction.

‘‘If we continue on this path on unilateralism over multilateralism, we could
end up in a state that is unstable.’’





  • [Livingontheland] World Bank warns on food-price rise, Tradingpost, 10/09/2010

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