World Bank: food prices to stay high but mkts intact

from Reuters India

SINGAPORE, The World Bank warned on Tuesday that it expects the cost of staple foods such as rice to stay high for years but said the world's food markets were intact and needed no intervention.

"This is not a few weeks, few months thing. It could be two or three years," World Bank Managing Director Juan Jose Daboub told reporters after a speech at a Singapore university.

He said global food markets were working and had not lost their ability "to fix themselves".

"It's better to have an imperfect market than a perfect bureaucrat deciding for others.

Daboub, a former finance minister of El Salvador, said 100 million people had been pushed back into poverty over the last two years due to higher food costs.

He also said that food prices doubling for three years was equivalent to going back seven years in the fight against poverty.

"The speed at which food prices have increased is startling," Daboub said, adding that in real terms, the price of rice was higher than at any time since the commodity price shocks in the mid-1970s.