IFA: EU must reaffirm food security to guard against global shortages

EUROPEAN policymakers should heed global political uncertainty and reaffirm food security within the EU, according to IFA president John Bryan.

Mr Bryan was responding to predictions by food industry analysts at a sugar industry conference in Dubai this week that global food shortages will lead to widespread stockpiling.

Analysts at the Kingsman Dubai Sugar Conference 2011 predicted that the US will lead a stockpiling trend, followed by other western nations. They also cited reports from Tunisia, Egypt and Libya that suggested soaring food prices are the key spark behind revolts in the Middle East.

“Greater political intervention in food matters is only to be expected,” Alan Winney, chairman of Emerald Group Australia, told press agency Bloomberg.

“Governments will be careful to take preemptive measures to prevent increases in food prices. Wheat may have done its job as far as prices are concerned, while corn may still gain on feed demand. Farmers can respond to higher grain prices but not to crops like sugar.”

The UN World Food Price Index soared to an all-time high last month. Wheat climbed to $9.20 a bushel on the Chicago Board of Trade, up 71% over the past 12 months. The price of corn is up 95%, soybeans up 44%, while sugar prices have doubled since May.

Mr Bryan said: “We are seeing the impact of lower food supplies on the political system. The European Union must avoid a situation developing where there is any threat to our productive base. This means abandoning any trade deals that could undermine food producers in Europe. The prospect of a Mercosur deal at this time would be damaging for the EU’s sustainable agricultural production.

“There are dangers inherent in allowing market volatility to take grip as this would affect food production. A safe supply of sustainable food cannot survive the boom/bust that has been accelerated by failing to regulate markets. In the longer term, the EU Commission must maintain the CAP budget post-2013 as it provides the certainty that food producers need.”

Abdolreza Abbassian, a senior economist at the US-based Food and Agriculture Organisation, said global wheat harvests may trail demand for a second year, spurring “widespread” hoarding and further price advances. Global corn output will need to rise 6%, wheat 4% in the 2011-2012 crop season to rebuild global reserves, he said.

The US Department of Agriculture predicts global corn stockpiles will shortly drop to a four-year low, with wheat reserves down 10% from a year earlier.