A one-day extraordinary intersessional meeting of the IGG on Grains and the IGG on Rice was held on 24 September 2010 at FAO Headquarters, Rome
Since July 2010, global cereal markets experienced a sudden surge in international wheat prices on concerns over wheat shortages prompted by the drought in the Russian Federation. These unexpected events raised important questions not only about the stability of markets but, even more importantly, about the accuracy of production forecasts and ultimately the overall supply and demand prospects.
The concern about a possible repeat of the 2007/08 food crisis resulted in an enormous number of enquiries directed to FAO from its Members and from the media, most of which fell on the Secretariat of the FAO Intergovernmental Group (IGG) on Grains to respond. This was a formidable task, given the extent of anxiety prevailing in markets. But it was also an educative one as it demonstrated how important the FAO role was not only for answering questions but, in this particular instance, also for calming a very nervous market.
It it was therefore proposed that an extraordinary Intersessional Meeting of the IGG of Grains and of the IGG on Rice be held. The previous meeting of the two IGGs (jointly with the IGG on Oilseeds, Oils and Fats) was held in November 2009. While it is customary to hold such events no more than once in a biennium, the Rules of Procedures of the IGGs allows for emergency meetings to be convened when deemed necessary. This is also consistent with FAO reforms under which IGGs should meet “when needed” rather than according to a strict biennial timetable. It was believed that the new episode of market disturbance, the second to happen within three years, provided ample justification for such a call.
Besides informing the Members of the latest supply and demand prospects for major cereals, the Secretariat provided information on how major production shortfalls, such as the one witnessed last year, may influence medium-term supply and demand prospects. More importantly, however, the purpose of holding this meeting was for exporting and importing countries to engage in constructive discussions on appropriate reactions to the market situation and on the future of the world cereal economy, especially in an institutional context. Well-functioning world cereal markets are critical for global food security.