Price of basic foodstuff

Two years after the last food crisis, food inflation is back. In Mozambique, riots broke out following the government's decision to raise bread prices by 30%, leaving seven people dead and hundreds injured. At the same time the Russian government extended its export ban on wheat by another 12 months prolonging upward pressure on grain prices and contributing to higher price instability in world markets. Corn prices are at their highest level since June 2009.

 

In Europe, the scandal of coca speculation and the sharp rise in wheat prices drive to reform the commodities trading rules. France is likely to use its presidency of the G20 to promote an overhaul of commodities markets. Brussels will introduce new norms, using the forthcoming review of the Markets in Financial Instruments Directive, in 2011 to push for reforms. AEFJN welcomes an effective regulation of speculative finance (including hedge funds) in food stock exchange and futures markets for food and agriculture.

 

European civil society calls for a new Common Agriculture and Food policy that ensure regulation, fair prices, sustainable production systems,…

 

Cocoa:

   In mid-July, European cocoa traders were angry because of US private speculation on London cocoa market, home of Europe’s largest commodities exchanges and large banks dealing raw materials. Armajaro, a US commodities trading company, attempted to corner the market in cocoa by taking delivery of 7% of the world's supply at a time when prices were at a 32-year high [$3,200 per tonne (£2,077) ]. According to Reuters (www.reuters.com/article/idUSLDE66F18T20100716 ), it took 240,100 of the 246,810 tonnes of cocoa held in the exchange's stocks. The fear was Armajaro would squeeze the market, forcing prices even higher.

   This event took place while the new international cocoa agreement was negotiated at the UN conference two weeks earlier. This will replace the current one in 2012. This treaty contains an elaborate definition of the objectives of a sustainable cocoa economy and promotes development projects. And, very importantly, it enhances market transparency. Now member countries have to ratify the treaty. Countries have agreed to create an economic committee that will examine statistical data, consumption, production, stocks and everything else that contributes to price determination. Producing and consuming countries, nongovernmental organisations (NGOs) and the private sector will be represented on the committee. Cocoa should not belong to governments alone any more.

 

   On their side, Ivory Cost and Ghana gov. met to enhance their power on global market. Ivory Cost and Ghana are trying to adopt a common strategy to really weigh on the market with their 60% share in world production of cocoa. More than a million peasants grow cocoa in Ghana which represents between 17-20 percent of smallholder incomes and 5.5 percent of GDP. In Ivory Cost, 600 producers who live directly or indirectly 6,000,000 people with an annual production of 1.2 million tons equivalent to 40 percent revenue and 15 per cent of gross domestic product. In Ghana the prices are stabilized while they are liberalized in Ivory Cost.

 

Coffee

Global stock of coffee are at their lowest level for a decade and coffee prices are at a 12-year high.

 

Sugar

Sugar price has been on a rollercoaster ride after hitting a 29-year peak in February, but then fell sharply. However,in early September, when Brazil - world's largest producer of sugar- announced warning crops may be lower than expected, the price climbed back to its highest level since March.