World Bank advises targeted steps for food prices

By Missy Ryan

WASHINGTON (Reuters) - Latin America, a net exporter of food commodities, will benefit overall from soaring crop prices, but governments must tread carefully as they seek to blunt the impact of high food prices on the region's poorest, a senior World Bank official said on Friday.

"Latin America is benefiting overall as a region from high food commodities," Pamela Cox, the bank's vice president for the region, told the Reuters Latin America Investment Summit.

Growing biofuel production, weak harvests, and rising demand from the developing world have helped bring record crop prices -- and worrying volatility -- to world markets.

For economically and geographically diverse Latin America, the trend is seen as a mixed blessing.

Commodities, including minerals, accounted for half of the economic growth across Latin America over the last five years, Cox said in an interview.

For countries like Argentina and Brazil, two of the world's leading farm producers, she sees the surge in crop prices as a welcome phenomenon.

But the trend also makes basic foodstuffs more expensive for those who can least afford it. In 2007, global food prices rose almost 40 percent, according to the United Nations, a trend that takes the biggest toll on poor city-dwellers whose wages often don't keep pace with higher prices.

The high prices take a different toll on Central American and Caribbean nations, which are net importers of food.