Brussels, 24/01/2011 (Agence Europe) - French President Nicolas Sarkozy has made the “urgent” issue of volatility of raw materials prices one the priorities of the French Presidency of the G20.
“If we do nothing, we risk rioting over hunger in the poorest countries, as well as an extremely negative impact on world growth”, Sarkozy told a press conference on the French presidency of the G20. He has developed four areas of action: - regulating the financial markets of raw materials. “We need common rules”, he observed; - improving the transparency of the physical markets. He argues that we need to “know the prospects of production, consumption and stocks. We will propose the creation of a joint database, like the one we have on oil, to prevent food crises”; - improving the food security mechanism at developing the agricultural offer; -lastly, “I would like us to look into ways of making the new insurance financial instruments work for the poorest countries, to allow them to protect themselves from price increases or incidents affecting harvests”, said Sarkozy.
France/Commission difference over speculation. “We must not live in the same world”, said the French agriculture minister, Bruno Le Maire, in Brussels on Monday 24 January, in response to a question from a journalist who noted that according to the European Commission, speculation is not one of the causes of the increasing volatility of agricultural prices. According to a draft, in its communication on “Challenges on the commodities and raw materials markets”, which it is to adopt on Wednesday 26 January, the Commission writes that “there is no conclusive proof of causality between activity on the derivative products markets and increased volatility and price hikes on the underlying physical markets”. It adds that “there is no systematic or conclusive proof suggesting that the price-setting process on the commodities markets has changed in recent years due to the growing importance of the derivatives markets”
“In my analyses, I do not have the Commission behind me”, lamented the French agriculture Minister, who said that it was “obvious that speculation increases price instability”. (L.C./transl.fl)