France urges G20 action on food commodities trading
France will use talks with other G20 nations to argue for tougher rules on global food commodities trading, as surging prices pose a risk to businesses and consumers.
France kicked-off two-day talks in Paris yesterday (22 June) to persuade G20 nations to impose caps on investments in food commodities, such as wheat, barley and sugar. Under its proposals, investors would also have to declare themselves as either speculative or commercial traders.
It is the first time that agriculture ministers have met within the G20 format and the talks reflect growing concern about soaring global food prices.
Food commodity prices have hit record levels this year, according to the food price index maintained by the United Nations’ Food and Agriculture Organisation (FAO). Last week, a joint report by the FAO and the Organisation for Economic and Co-operation and Development predicted that average prices for cereals over the next decade will be 20% higher than the average for the previous ten years.
Growing demand from emerging markets, together with a series of poor harvests, have contributed to recent price increases. However, the spotlight has also fallen on futures markets for commodities.
France’s president, Nicolas Sarkozy, has accused “financial speculators” of forcing up prices, to the detriment of businesses, consumers and developing nations. Last week, at a meeting in Brussels, Sarkozy criticised the current system for allowing investors to trade up to “46 times the world production of wheat”.
As part of its G20 proposals, France also wants the creation of a global database on world agricultural production and stocks.
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