Global alarm over a potential repeat of the 2008 food crisis escalated after data showed food prices had jumped 6 percent last month and importers were snapping up a shriveled U.S. grain crop, helping drive corn prices to a new record.
Ahead of a critical government report on Friday on the state of the U.S. corn and soybean crops, which have been decimated by the worst drought in over five decades, the United Nation's food agency warned against the kind of export bans, tariffs and buying binges that worsened the price surge four years ago.
"There is potential for a situation to develop like we had back in 2007/08," the Food and Agriculture Organisation's senior economist and grain analyst Abdolreza Abbassian told Reuters.
A mix of high oil prices, growing use of biofuels, bad weather, soaring grain futures markets and restrictive export policies pushed up prices of food in 2007/08, sparking violent protests in countries including Egypt, Cameroon and Haiti.
Unlike that demand-driven spike, however, the current rally in grains has been fuelled largely by a dire drought covering the U.S. Midwest. After slashing its corn crop estimate by 12 percent last month, the U.S. Department of Agriculture is expected to report a further 15 percent decline in a report on Friday, providing the most authoritative view yet of the weather damage to the world's biggest grower.