Chicago, May 22 - Increasing the free trade of agricultural products could help feed the world's hungry and curb the rising price of bread, vegetable oils and milk, Cargill Inc's corn milling risk manager said on Thursday.
"Increased trade offers a more stable and secure global food system," said vice president Rich Torres at the All Candy Expo trade show in Chicago. "Trade promotes prosperity and prosperity promotes peace."
Corn, soybean and wheat prices at the Chicago Board of Trade hit record highs this year amid increased global demand for food, rising oil prices and government mandates for biofuels.
In the United States last year, food prices rose at their fastest pace in 15 years. World food prices rose 40 percent last year, causing food riots, hoarding and bread lines in some countries.
The rally in agricultural commodities shows little sign of ending, Torres said.
"I'm really hard pressed to see any relief in other commodity markets as long as crude stays on this path," he said. "Corn has been showing a very strong link to petroleum ...Volatility, I'd be very hard pressed to say is going away any time soon."
Crude oil hit a record high for a third straight day on Thursday, climbing past $135 per barrel before retreating amid profit taking and a stronger dollar.
About 30 percent of the U.S. corn crop this year will be used to make ethanol, according to estimates from the U.S. Agriculture Department.
"Rather than calling biofuels a villain or a savior, a better way is to allow flexibility through freer trade," Torres said.
The average world tariff on agricultural products is 62 percent, said Cargill, citing USDA data. The average tariff the United States puts on imported agricultural products is 12 percent.
Agricultural tariffs need to be reduced along the lines of industrial tariffs, which have fallen to 4 percent from 40 percent since World War II, Torres said.
Minneapolis-based Cargill is one of the world's largest privately held corporations. The company is a leading U.S. grain and meat exporter, a producer of ethanol, a top energy trader, and majority owner of Mosaic Co and a top global producer of fertilizers.
Cargill also is majority owner of Black River Asset Management, a family of hedge funds, and controls CarVal Investors, a global value investment firm.