Nov 18, 2009

ROME (Reuters) - A new food price crisis is only a matter of time, the U.N. food envoy said on Tuesday, criticising world leaders for not tackling what he saw as the key factors behind price spikes in 2008 -- speculation and biofuels.

The U.N. Special Rapporteur Olivier De Schutter also said a U.N. food summit in Rome failed to address the domination of global food markets by large agri-business corporations.

"Maybe it will be April 2010, maybe April 2011, but we will have a new food price crisis because the direct causes of the 2008 spike are still there," De Schutter said in an interview.

"There are indications already, because oil prices are going up and they are very closely linked to agricultural commodities prices. As soon as a big producer will be in difficulty ...speculation will set in," he told Reuters.

He said commodity investment funds had invested massively in agricultural futures markets in late 2007, and were followed by a wave of speculative traders betting on continued food price rises. That contributed to pushing food prices to record highs last year, until the speculative bubble burst in the summer.

An increase in the production and use of biofuels based on agricultural commodities was also instrumental in driving food and land prices up, he said.

De Schutter said a Rome summit declaration was weak on both issues. He mentioned commodity reserves and quotas for biofuels as possible measures to keep a lid on prices.