Sharp Rise in Wheat Prices Sparks Panic in Global Markets

The UN Food and Agriculture Organization (FAO) pointed out on the 24th that drought in Russia and floods in Pakistan have reduced grain output, and the Russian government has announced an extension of its grain export ban. International wheat prices have risen sharply over the past few weeks due to panic over food shortages, once again triggering fears of a global food crisis.

    The FAO's intergovernmental Grains Group and Rice Group held an emergency meeting in Rome on the 24th to discuss effective measures to prevent a surge in food prices.

    FAO Director-General Jacques Diouf pointed out that the surge in international food prices from the second half of 2007 to 2008 triggered a global food crisis, the aftermath of which has still not subsided. International food prices have recently surged again, and the situation shows signs of worsening.

    But he noted that the global food market is vastly different from three years ago. This year's global cereal production is expected to reach its third-highest level in history; the world's stock-to-use ratio is currently far above the nearly 20% low recorded in 2007-2008, and is far from touching the internationally recognized warning line of 17%-18%.

    In addition, other factors that led to the 2007-2008 food crisis are also absent at this time. Countries need not overreact, but should continue to monitor market developments.