CHINA - dumped plans to import several million tonnes of expensive corn and South Korea unveiled cuts in import tariffs on some products, underscoring the dilemma over how to tackle rising food prices. In India, where vegetable prices have risen more than 70 percent in the past year, the government said it would review the import and export of essential commodities, adding state run firms would intensify purchases of some basics. A rally in grains prices after a U.S. report on Wednesday warned of dwindling global supplies suggested further price pressures may be in the pipeline, just as Sudan saw rare public protests against cuts in sugar and petroleum product subsidies. Governments around the world have been taking measures to tackle soaring grain prices and head off social unrest, with north African countries Libya, Algeria and Morocco either cutting taxes on foods or regulating prices and stepping up supplies. The Philippines on Thursday said it would suspend import duties on wheat and cement imports. World food prices hit a record high in December after adverse weather affected crops, the United Nations' food agency said in a report last week that raised concerns about inflation, protectionism and social unrest -- factors that contributed to the 2008 food crisis.
OIL MENACING
While most analysts doubt the world is heading for a crisis similar to 2008, when food prices spiked to fire up inflation and sparked violent protests in countries including Egypt, Cameroon and Haiti, a rise in oil prices also looks menacing. Egypt, which imports around half of the food eaten by its 79 million population and is struggling with double-digit food inflation, will not face similar scenarios of riots in Algeria and Tunisia, Egyptian trade minister told local media. "The government is committed to subsidizing food commodities, and we are looking for additional resources to face rising prices," a newspaper quoted Rachid as saying. London Brent crude at close to $100 a barrel is trading at its highest price since 2008, when oil hit record highs and contributed to the inflation spike. Wheat prices rose 47 percent last year, corn more than 50 percent and U.S. soybeans by 34 percent. The U.N. Food and Agricultural Organization (FAO) said in its report key grains prices could rise further, a view underlined by a U.S. report published on Wednesday. The U.S. Department of Agriculture report reduced estimates for U.S. corn and soybean harvests, trimmed its corn and soy output forecast for drought-hit Argentina and cuts its outlook for wheat production in flood-hit Australia.
