Leading members of the Group of 20 nations are prepared to trigger an emergency meeting to address soaring grain prices caused by the worst U.S. drought in more than half a century and poor crops from the Black Sea bread basket.
France, the United States and G20 president Mexico will hold a conference call at the end of August to consider whether an emergency international meeting is required, aiming to avoid a repetition of the food price spike that triggered riots in poorer countries in 2008.
The United States uses 40 percent of its corn crop to produce ethanol, drawing criticism for using food for fuel when hunger is widespread in some poorer countries.
"They (G20) might talk about the U.S. ethanol mandate requirements, but I don't see them making any massive responses at the moment. They don't have a lot of tools at their disposal," said analyst Muktadir Ur Rahman Of Capital Economics.
The U.N.'s food agency stepped up pressure on the United States on Friday to change its biofuel policies, arguing it was more important to grow crops for food rather than fuel.
The U.N. Food and Agriculture Organisation's food index jumped 6 percent in July to higher than in 2008 and the FAO warned against the kind of export bans, tariffs and buying binges that worsened the surge four years ago.
The forum has no power to impose binding decisions on member states, but it is hoped that discussion can discourage countries from taking unilateral action.
Russia banned grain exports for almost a year after a severe drought two years ago. Weather problems this year have fueled speculation it could resort to export curbs again. However, French officials have said that Russia has given reassuring indicators in contacts through the AMIS system.
"The aim is to talk about the situation and avoid measures like export embargoes, which would be damaging for everyone," the French official said.
COMPILED FROM: http://www.reuters.com/assets/print?aid=USBRE87C0EI20120813; http://www.chicagotribune.com/news/sns-rt-us-food-g20-callbre87c0ei-20120813,0,3150196.story?page=2 AND http://video.cnbc.com/gallery/?video=3000109058
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