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US, Mexico, France to discuss soaring grain prices
by Staff Writers
Mexico City (AFP) Aug 22, 2012


With food prices skyrocketing, Mexico, France and the United States will hold talks next week to discuss possible ways to stabilize the grain market, a Mexican official said Wednesday.

Officials from the G20 nations will hold a teleconference on Monday to discuss the situation in the drought-stricken United States and the possibility of wider talks within the Group of 20 top economies, he told reporters.

The trio will examine "mechanisms that could lead to a stabilization" of the market and mull policy recommendations for affected nations, said Kenneth Smith Ramos, the foreign affairs coordinator at the Mexican agriculture ministry.

US corn and soybean prices soared to record highs this week as a survey showed worse-than-expected crop damage from a brutal drought across the country's central breadbasket.

Smith, whose country holds the G20's rotating presidency until November, said the rising US grain prices are also linked to the fact that 40 percent of US corn production is used to produce ethanol.

Carlos Vazquez, Mexico's agricultural policy adviser in the United States, said Washington's ethanol production "has created a market distortion" and should be modified.

Smith said the US, Mexican and French officials will discuss mechanisms to mobilize food for African nations facing famine due to the grain shortage.

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