(Agencies)
Updated: 2008-04-29 21:36

World Bank plea

The UN Food and Agriculture Organisation's (FAO) Food Price Index, measuring the market prices of cereals, dairy produce, meat, sugar and oils, was 57 percent higher in March 2008 than a year earlier.

The surge is due to several factors, including increased demand in developing countries, higher fuel costs, drought in Australia, the use of crops for biofuels, and speculation on global commodity markets.

And developing world farmers, often the poorest in their countries, are not benefiting from the higher prices. They tend to eat most of what they grow rather than selling it, and higher prices for fuel and fertilizer are putting them off growing more, World Bank analysis shows.

"Even in some areas where people know that prices are higher, they are not planting more because they are fearful that they face very high input costs," Zoellick said.

There was at least some short-term easing in prices of key commodities on Tuesday.

US rice futures fell more than 2.5 percent, deepening a retreat from last week's record high as the world's biggest exporter Thailand said it would release government stocks for domestic use and traders looked ahead to Asian harvests.

The Thai pledge to release 2.1 million tonnes of stockpiled rice came a day after a trade official said the country's rice prices were likely to ease by about 20 percent in coming weeks on increased supply from the new domestic crop.

Rice prices are expected to ease as countries rush to boost output, but the market is unlikely to return to levels of recent years, He Changchui, the FAO's Asia head, said in Bangkok.

India slapped export taxes on basmati rice and other products as the government unveiled a series of moves to tackle inflation fuelled by the rise in food prices.

The World Bank called on countries not to ban exports of food, saying that only worsens the problem.

"We are urging countries not to use export bans," World Bank President Zoellick said in a statement. "These controls encourage hoarding, drive up prices and hurt the poorest people around the world who are struggling to feed themselves."

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