The global food crisis is imperative to regulate grain prices

Ashim Feng Braun in the face of the current extreme rise in wheat prices, we may be in the early stages of another global food price crisis.　　Even if it does not turn out to be the kind of dramatic food crisis from 2007 to 2008-from corn to rice, the prices of major agricultural products have soared to record levels, triggering food riots in countries such as Bangladesh and Haiti-but this is an absolute indication that the global food market is at risk. We have learned some lessons from the 2008 crisis, but too little has been done to prevent future crises, particularly the failure of global food markets, a failure that is now plaguing global markets.　　At present, the determination of global food prices depends on three main factors: anticipation of future supply and demand, the growing influence of speculators in commodity markets and the importance of food prices for political stability in some countries. The recent rapid rise in international wheat prices underscores the problem. Last week, wheat futures in September saw the biggest gains since 2008. The current wheat price broke through 7 dollars per bushel, for the first time since September 2008. The downward adjustment in output expectations in Russia, Ukraine and Western Europe is a trigger. Russia's ban on wheat exports has increased the risk of soaring prices and has again undermined confidence in food trade.　　Even a small drop of 3% to 4% per cent in global wheat production would cause huge price swings. Moreover, the pricing of the world's major commodity exchanges has been largely driven by speculation, which has pushed prices higher. Food markets are not only linked to energy markets, but also to financial markets – in short, food trade has been "financially". There is growing evidence that some financial capitals are turning to commodities, including food, from speculation about real estate and complex derivatives.　　Recently, in order to curb excessive speculation, the authorities to control the financial markets, but basically did not touch the commodity market, which has become the financial system to attract speculative "soft rib." The food price crisis will not have a major impact on the relatively affluent population. But for 3 billion of people at the bottom, this would constitute a nutritional catastrophe that would have dire long-term adverse consequences for health. According to current wheat price changes, to 50% of the increase, but within a few days of things.　　Policymakers have recognized this tipping point and have tried to act as soon as possible before reaching that tipping point. Today, we must distinguish between the necessary initiatives that should be implemented primarily by a government and those that are best dealt with at the international level. The issue of food price volatility must be addressed at the global level.　　It is essential to ensure open trade and a transparent and moderately regulated market system. We should also curb the excessive speculation of commodity producers. Transparency should therefore be enhanced, while the speculative costs of non-commercial traders must be increased. For example, a capital deposit can be established by way of establishment. However, it is wrong to simply exclude food from the speculative futures market, as these activities also serve as useful intelligence informationWith。 In addition, we must establish a credible international food reserve policy.　　The Group of Eight (G8) meeting in 2008 and 2009 identified this as an option that required further exploration, but failed to resort to implementation. The improvement of market function must be accompanied by the acceleration of public investment in agricultural field.　　Internationally coordinated policies must ensure the health and sustainability of these investments, which they do not yet have. Finally, there has been a long awaited move towards a global architecture for agriculture and food policy. Food and nutrition security should be an important topic at the upcoming meeting of the Group of 20 (G20) and the United Nations (UN) Millennium Goals.　　They must carry out the unfinished business of G8. This article was originally contained in the FT's Chinese web, with a slight omission. The author is director of the Centre for Development Studies at the University of Bonn (University of Bonn) and former director of the International Food Policy Research Institute (International Food Policy)