Authoritarian governments across the world are aggressively stockpiling food as a buffer against soaring food costs which they fear may stoke popular discontent.
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Riots started in Tunisia initally over the price of staple food like sugar, salt and grain Photo: AP |
4:11PM GMT 28 Jan 2011
Commodities traders have warned they are seeing the first signs of panic buying from states concerned about the political implications of rising prices for staple crops.
However, the tactic risks simply further pushing up prices, analysts have warned, pushing a spiral of food inflation.
Governments in Asia, the Middle East and North Africa have recently made large food purchases on the open market in the wake of unrest in Tunisia which deposed president Zine al-Abidine Ben Ali.
Resentment at food shortages and high prices, as well as repression and corruption, drove the popular uprising which swept away his government.
Youths reportedly chanted "bring us sugar!" in the demonstrations which toppled his regime.
Nouriel Roubini, the New York University economics professor who predicted the financial crisis, this week told the World Economic Forum in Davos that high prices were "leading to riots, demonstrations and political instability." "It's really something that can topple regimes, as we have seen in the Middle East," he said.
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