France, the United States and G20 president Mexico will hold a conference call at the end of August to discuss whether an emergency international meeting is required to tackle soaring grain prices caused by the worst U.S. drought in half a century.
A French agriculture ministry official said the call would decide whether to convene the first meeting of the G20's Rapid Response Forum. The body was created last year to promote early discussion among decision-makers about abnormal market conditions with the aim of avoiding unilateral action.
"If the situation requires it, a meeting of the Rapid Response Forum could be called as soon as the start of September," the official said, adding the forum could hold its discussions in person or by a conference call.
"The aim is to talk about the situation and avoid measures like export embargoes which would be damaging for everyone," he said.
Benchmark Chicago corn climbed to an all-time high on Friday after the U.S. Department of Agriculture cut its production estimate by 17 percent, intensifying fears the world is headed for a repeat of the 2008 food price crisis.
The conference call will discuss a report on agricultural prices requested by France last month and compiled by the Agricultural Market Information System (AMIS).
This system, created last year under France's presidency of the G20, is designed to share information on crop prices with a view to averting a repeat of the 2007-08 food crisis.
France currently presides both the forum and the AMIS system, which is based at the U.N. Food and Agriculture Organisation (FAO) in Rome. The United States will take over the reins in October.
"France...and the United States remain attentive to any new fact that could justify a meeting of the Rapid Response Forum," French Agricultural Minister Stephane Le Foll said in a statement today.
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 and weather problems this year have fuelled market rumours it could resort to export curbs again. However, French officials have said the Russia has given reassuring indicators in contacts through the AMIS system.
The FAO last week said its food index jumped 6 percent in July to higher than in 2008 and warned against the kind of export bans, tariffs and buying binges that worsened the price surge four years ago.
Christopher Matthews, a spokesman for the FAO, on Monday said it would participate in the conference call in its capacity as secretary of AMIS.
"The call will discuss what can and what can't be done," he said. "It will be a first discussion, with a view to probably calling a meeting at a later date, though that has not yet been decided."