Although the UN Food and Agriculture Organisation’s Food Price Index, released at the beginning of the month, revealed that food prices have remained high throughout August, with some staple grains still at the record heights seen in July, the organisation’s head today said a food crisis is unlikely.

Following the release of US Department of Agriculture forecasts, which suggest the country’s worst drought since the 1950s may have done less damage than had previously been thought, FAO chief Jose Graziano da Silva said “there is no reason to panic” over a possible food crisis.

The USDA report cut estimates for the country’s maize crop by less than one percent on Wednesday (12th September). Maize prices have fallen nearly ten percent from record heights set at the beginning of August. Grain rallies were sparked in July, when concerns over the US drought, then at its apex, and drought in the Black Sea region conflagrated panic in international markets.  

Nevertheless, some analysts have said that the USDA may have been reticent in cutting crop forecasts as the maize harvest is only 15 per cent complete, and pointed out that major revisions of the world number one producer’s maize crop usually fall in October. Therefore, many commentators have remained cautious.

Speaking in Istanbul, Turkey on Thursday, FAO director general Graziano da Silva said the U.S. report had sent a "very good message." He had previously called on the US government to suspend its biofuel mandate, which sees 40 percent of the country’s maize crop going to produce bioethanol.

Echoing the calls made last month by the FAO chief, the French government has pledged to “push for a pause in the development of biofuels competing with food" to avoid volatility in food prices. The announcement was made by a French government spokesperson following a cabinet meeting on Wednesday.

During its presidency of the Group of 20 last year, France attempted unsuccessfully to implement measures to curb financial speculation on food commodities and reduce biofuel policies that conflict with food needs in an attempt to ease volatility in  world food prices. The France-led G20 did agree on setting up a monitoring and rapid response system, which it is hoped may be able to avert the worst effects of spiralling food costs.

Wednesday’s announcement is in line with plans proposed by the European Commission to limit production of crop-based biofuels. There are fears that such biofuels can reduce access to food for the poorest people, through creating competition and rising food prices and indirect land use change. Furthermore, the European Commission has warned the fuels produced may not be as environmentally friendly as had previously been thought.

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