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SEOUL, Apr. 30, 2008 (Reuters) — The chances of famine in North Korea have increased in line with the soaring price of rice on global markets, a Washington-based institute said on Wednesday.
"The country is in its most precarious situation since the end of the famine a decade ago," said a paper from the Peterson Institute for International Economics.
A jump in prices for foodstuffs has hit many poor nations this year and sparked riots in parts of Africa and Asia. Export restrictions by leading suppliers have fuelled insecurity and market speculation has also pushed prices higher.
The head of a new United Nations task force set up to ensure a coordinated international response to the food crisis said malnutrition was more likely than outright famine in most countries, at least in the near future.
"People, particularly those on the lowest incomes, will be eating less and less well," John Holmes told a news conference in Geneva. "I don't think that in the very short term we are talking about starvation and famine."
Egyptian President Hosni Mubarak proposed a 30 percent increase in the salaries of public sector employees to help cover the increasing cost of food while China urged local authorities to "strictly control" grain exports.
A proposal by Japan to limit restrictions on exports of food got a "cool response" on Wednesday, especially from developing countries, the chairman of the World Trade Organization's (WTO) farm talks, New Zealand's Crawford Falconer, said.
Japan, the world's third biggest food importer, was joined by Switzerland in proposing limits to restrictions on food exports after moves by several countries to ban or tax exports.
RELIED HEAVILY
Even in a time of good harvests North Korea finds itself about 20 percent short of what it needs for foodstuffs, Stephan Haggard, co-author of the Peterson Institute paper, said.
The secretive nation has grown more dependent on rice imported from neighboring China since a famine in the late 1990s that experts estimate killed at least 1 million people.
North Korea has in the past relied heavily on aid from China, South Korea and U.N. aid agencies to fill the gap.
But the new conservative government in South Korea has said it will tie aid to progress its neighbor makes in giving up development of nuclear weapons, on which Pyongyang is stalling.
China has its own problems keeping runaway grain prices under control, which means it cannot afford to be as generous this year, analysts say.
On Wednesday, China's commerce ministry reaffirmed government curbs on grain exports and urged local authorities to increase reserves of grains, meat and cooking oils to ensure supplies and keep food prices in check.
China's grain prices are among the lowest in the world as Beijing constantly releases state reserves to keep prices in check. But the rice price in the south has picked up and risen more than 10 percent over the past weeks.
On the markets, rice prices in top exporter Thailand dipped below $1,000 a ton as buyers held back from purchases in the hope that prices, which have trebled this year, would ease.
On Tuesday, Thailand said it would gradually release 2.1 million tons of stockpiled rice to the domestic market to ease the plight of Thai consumers, and maintain its 2008 export target of at least 9 million tons.
India unveiled measures on Tuesday to safeguard domestic food supplies by imposing export taxes on basmati rice.
India, where food often accounts for a much higher proportion of people's expenditure than in developed countries, had already banned non-basmati rice exports.
In Egypt, Mubarak's proposal of a public sector salary increase was a response to unrest over high food prices. The poorest Egyptians include the many low-paid civil servants.
Urban inflation in the year to March hit 14.4 percent, the highest rate in three years. Bread and grain prices soared 48.1 percent, fruit and vegetable prices rose more than 20 percent, and edible oils were up 45.2 percent.
In Paris, Agriculture Minister Michel Barnier discussed the sale of French wheat to Egypt with Egyptian Trade Minister Rachid Mohamed Rachid at a meeting on Wednesday, but no deal was signed, a spokeswoman said.
Canada, responding to a U.N. plea for help to offset the rise in food prices, on Wednesday pledged an extra 50 million Canadian dollars ($49.5 million) for international food aid and said it would allow its money to be used to buy food abroad.
Arab newspaper Al-Hayat reported on Monday that Rachid would discuss buying 1 million tons of wheat during his Paris visit.
Food price rises are hitting home even in countries such as Kazakhstan, an oil-rich nation which is the world's fifth largest wheat exporter.
Alma, who scrapes a living by selling grain and sugar at a bustling market in Kazakhstan, says she cannot afford to buy clothes and other essentials for her family any more.
"All we buy is food, food and food," she said as she explained to customers why the price of flour had risen overnight. "I don't know what will happen tomorrow."
(Writing by Robert Woodward; Editing by Sami Aboudi)
