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16:40, 01 September 2014 Monday
Update: 10:08, 14 September 2012 Friday

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Australia rejects French global grain stockpile proposal
Australia rejects French global grain stockpile proposal

Global wheat prices have surged nearly 40 percent since mid-June when the worst drought in 56 years wilted U.S. crops, and dry weather in Australia and the Black Sea region has added to worries about supplies.

World Bulletin / News Desk 

Major wheat exporter Australia does not support a French proposal to create global grain stockpiles aimed at stabilising food prices, but would agree to the measure if it was for humanitarian purposes, the agriculture ministry said on Friday.

Global wheat prices have surged nearly 40 percent since mid-June when the worst drought in 56 years wilted U.S. crops, and dry weather in Australia and the Black Sea region has added to worries about supplies.

France first raised the issue of reserves last year as it chaired the Group of 20 leading economies, and this week, French President Francois Hollande said he was launching a global campaign to win support for the measure amid fears that the world could be on the brink of a third food price panic in four years.

"Australia is cautious about the benefits of food reserves and only supports limited and strategically managed mechanisms that are strictly for emergency humanitarian purposes," said a spokeswoman for Joe Ludwig, Minister for Agriculture, Fisheries and Forestry.

"We do not recommend stockpiling generally as this can have a negative impact on prices and production."

Analysts were also sceptical that many nations will side with the French proposal.

"I personally don't think stockpiles are viable to solving any particular episodes of food price inflation," Luke Mathews, commodities strategist at the Commonwealth Bank of Australia said. "I would be very surprised if Australia implemented stockpiles." 



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