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IMF head gives food price warning

Sunday, 13 April 2008 01:32 UK


The IMF's Strauss-Kahn wants strong action on food price inflation

The head of the International Monetary Fund (IMF) has warned that hundreds of thousands of people will face starvation if food prices keep rising.

Dominique Strauss-Kahn said that social unrest from continuing food price inflation could cause conflict.

There have been food riots recently in a number of countries, including Haiti, the Philippines and Egypt.

Meeting in Washington, the IMF called for strong action on food prices and the international financial crisis.

Market turmoil

Although the problems in global credit markets were the main focus of the meeting of the IMF's steering committee of finance ministers from 24 countries, Mr Strauss-Kahn warned of dire consequences from continued food price rises.

"Thousands, hundreds of thousands of people will be starving. Children will be suffering from malnutrition, with consequences for all their lives," he told reporters.

He said the problem could lead to trade imbalances that may eventually affect developed nations, "so it is not only a humanitarian question".

Food prices have risen sharply in recent months, driven by increased demand, poor weather in some countries and an increase in the use of land to grow crops for transport fuels.

The steering committee also called for "strong action" among its 185 members to deal with "the still unfolding financial market turmoil and... the potential worsening" of housing markets and the credit crunch.

The finance ministers did not dissent from the IMF's previous forecast that only a moderate slowdown in world economic growth is the most likely outcome over the next year or two.

http://news.bbc.co.uk/1/hi/business/7344892.stm