The OECD does not expect a repeat of the 2007-08 food crisis because market fundamentals are different now and there is no shortage of grain, a senior OECD official told Reuters Oct. 15.
“Fundamentals are not there that would make us fear a repeat of the kind of price spikes that we had in 2007 and 2008,” Carmel Cahill, OECD trade and agricultural directorate senior counsellor, said on the sidelines of a food and farming forum.
“We don’t have a confluence of all the different factors which were going on in 2007 and 2008,” Cahill said.
A grain price rally in the past few months, fuelled by an export ban in drought-hit Russia and concerns about smaller crops in the United States and other major producers, has sparked worries about a repeat of food riots and panic buying seen in 2007 and 2008.
Cahill said grain markets were overreacting to the crop situation in Russia and the United States while global grain crops were strong and overall supplies, including stocks were sufficient.
“There is no real shortage of wheat… there is no shortage of corn in the world,” she said.
Recent grain price spikes would not force the OECD to revise its long-term projection that agricultural prices in the coming decade would be higher in real terms than they were in the decade before the 2007-08 food crisis, she said.