Attempts to Avoid Food Crisis May Worsen Problem

Attempts by major food importing nations to shelter their populations from the effects of a U.S. drought may make a bad situation worse, five years after the last jump in crop prices provoked rioting in some of the world's most fragile states.

Many governments have watched on the sidelines as a drought in the U.S. farm belt sent prices of corn (maize) soybeans and wheat soaring, hoping that the market would eventually ease. However, their nerve seems to have broken with Mexico, the world's second biggest corn importer which suffered "tortilla riots" in 2007, making a huge purchase last week.

With fears growing that drought will also cut the wheat harvest in the Black Sea region, buyers in the turbulent Middle East are now also pouring on to the markets.  "A cascade effect is not inconceivable and may well be taking place - wheat prices have shot up nearly 50 percent since the beginning of July," said J.Peter Pham, a director with U.S. think tank the Atlantic Council.

"If such proves to be the case, some of the most fragile states may well be shaken," added Pham, who also advises U.S. and European governments on strategic issues. Read more >>