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US, Mexico, France to discuss grain prices
US, Mexico, France to discuss grain prices

With food prices skyrocketing, Mexico, France and the United States will hold talks next week to discuss possible ways to stabilise the grain market.

Officials from the G20 countries will hold a teleconference on Monday to discuss the situation in the drought-stricken US and the possibility of wider talks within the Group of 20 top economies, Kenneth Smith, the foreign affairs coordinator at the Mexican Agriculture Ministry said.

The trio will examine "mechanisms that could lead to a stabilisation" of the market and mull policy recommendations for affected countries, Mr Smith said.

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 per cent 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.

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