Protests over rising food prices may spread as falling stockpiles caused by crop failures and greater use of grains for biofuels stoke inflation globally, the Food and Agriculture Organization said. ``We have seen riots around the world and there's risk that these will spread because of rising prices in countries where 50- 60 percent of incomes go to foods,'' FAO Director General Jacques Diouf told reporters in New Delhi. ``The problem is serious.''
Record high grain prices have led to strikes in Argentina, riots in Cameroon, Burkina Faso, Morocco and the Ivory Coast, and a crackdown on illicit exports in Pakistan and the Philippines. The World Bank says 33 countries from Mexico to Yemen may face social unrest because of spiraling food and energy costs.
Food prices can't be tamed ``overnight,'' said Diouf, after meeting India's farm minister Sharad Pawar. ``It is a structural problem and needs a structural solution,'' Diouf said.
A combination of rising fuel prices, economic expansion in China and India, and global demand for biofuels are causing food prices to soar, the FAO said earlier today in a release.
``Agricultural markets are becoming increasingly intertwined with non-agricultural markets such as energy and manufacturing,'' the FAO said.
Commodity prices are posting their seventh year of gains. The UBS Bloomberg Constant Maturity Commodity Index of 26 raw materials has more than tripled in the past six years as global demand led by China outpaced supplies of metals and crops.
To contact the reporter on this story: Pratik Parija in New Delhi at pparija@bloomberg.net.