Rising global food prices to dominate deliberations at G-20

Rising global food prices to dominate deliberations at G-20

The meeting, which will also be attended by Indian Finance Minister Pranab Mukherjee, will deliberate on steps to moderate volatility in energy prices, check tax evasion, disruptive capital flows, reform the International Monetary System (IMS) and work on indicative guidelines for quantifying global imbalances.

Ahead of the G-20 meeting of Finance Ministers and Central Bank Governors, the World Bank has warned that food prices worldwide are rising to "dangerous levels" and have pushed 44 million people in developing countries into poverty since June last year.

The food price index has climbed 15 per cent between October 2010 and January 2011, the World Bank said, adding that global wheat prices have doubled during the same period.

"Sugar and edible oils have also gone up sharply. Other food items essential for dietary diversity in many countries have increased . This includes vegetables in India and China, and beans in some African countries," it noted.

India, which has been witnessing high food prices, will impress upon the G-20 ministers to work on policy options to improve the functioning of the commodities market.

"Finance Ministers... are expected to exchange views on the recent trends and volatility (of food and energy prices), make an assessment of their possible macroeconomic consequences on growth and inflation, and discuss policy options with a view to improving the functioning of commodities market", India's Finance Ministry said in a release yesterday.

France, which is holding the first meeting of the Finance Ministers and Central Bank Governors under its presidency, said it "would like to find collective solutions to reduce excessive price volatility, particularly of agriculture and energy commodity prices, which undermines world growth and threatens food security."

It has also been decided to hold a meeting of the G-20 Agriculture Ministers in June to work out solutions for strengthening food security and enhancing agricultural supplies.

With global economic recovery still fragile, uneven and fraught with significant downside risks, India will press for a coordinated response to deal with current problems.

According to the International Monetary Fund's (IMF) latest forecast, the increase in global output is likely to moderate to 4.4 per cent in 2011 from 5 per cent a year ago.

Similarly, the GDP growth rate in Euro area will decelerate to 1.5 per cent from 1.8 per cent in 2010, it said.

The IMF is scheduled to make a presentation on its assessment of the world economy at the start of the Finance Minister's conference here tomorrow.

During his stay in Paris, Mukherjee will meet his French counterpart Christine Legarde and deliberate on bilateral and multilateral issues of mutual interest including revenue related matters.

His agenda in Paris also include a meeting with the representatives of the BRIC nations, which besides Mukherjee comprises of Finance Ministers of China, Brazil and Russia.

The agenda of the BRIC meeting include assessment of the G-20 Framework, reform of the global economic system, preparations for BRIC Summit (Beijing) and BRIC economic co-operation.

Mukherjee will also be a lead speaker along with Canadian Finance Minister Jim Flaherty at one of the sessions of the conference.

The G-20, a grouping of the developed and developing nations, besides India, comprises Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Korea, Turkey, the United States and European Union.

Besides the ministerial meetings, France will also host the 6th G-20 summit at Cannes on November 3-4, 2011 before passing on the baton to Mexico.