WFP's Sheeran Says Speculators Are a Cause of Food Price Crisis, But Has No Suggestions

Byline: Matthew Russell Lee of Inner City Press at UN
www.innercitypress.com/wfp1foodprices042408.html

UNITED NATIONS, April 24 -- As it raises money to respond to the food price crisis, the UN's World Food Program faces at least two issues, one of them head-on, the other less directly. Asked Thursday about the role of speculators in driving up food prices -- and, by implication, how to ensure that additional emergency funding doesn't just further benefit the speculators -- WFP director Josette Sheeran said she is not an expert in this, that WFP's focus is on feeding people. If not WFP, who in the UN system would know and be able to address the financial underpinning of today's global food markets? Video here, from Minute 41:19.

Ms. Sheeran spoke at greater length about shifts in WFP's procurement toward, she said, the developing world. But she also said that WFP does not want to compete with local markets where there is a shortage, and therefore looks to surplus markets in order to make purchases. WFP has two goals at cross-purposes: buy in poorer, more food-starved countries in order to build capacity, but don't buy in food-starved countries so as not complete with local markets.

Ms. Sheeran mentioned WFP purchases in the Democratic Republic of the Congo and of salt in Senegal. She said that Mozambique after its floods faced logistical challenges "like after [Hurricane] Katrina, and that WFP had bought 70% of its food to response from inside Mozambique itself. She did not address WFP's sometimes-controversial work-for-food programs. She demonstrated a solid, almost troubling knowledge of intra-UN politics, going out of her way to praise not only FAO's Jacques Diouff, with whom she obviously must work closely, but also Kemal Dervis who she identified with the UN Development Group, and President Wade of Senegal. She said she was aware of the Commodities Futures Trading Commission meeting that Inner City Press asked about, but then declined to make any recommendation about limiting or regulating speculation.

Case in point is Dwight Anderson's Ospraie Capital, which Inner City Press explicitly asked Ms. Sheeran about. Video here, from Minute 41:19. Anderson has profited handily from the crisis, but now seeks to fly under the radar, buying up the rights to all photographs of himself. How to ensure that WFP's intervention into markets doesn't just benefit speculators like Anderson? One would like to think that WFP and Ms. Sheeran are making sure this doesn't happen. But nothing was said in this regard on Thursday. We will continue to follow this issue.

And see, www.innercitypress.com/wfp1foodprices042408.html