Global food prices on the rise again: World Bank

 Whole Foods grocery store worker Adam Pacheco (L) stacks vegetables while customers shop in the produce section at the Whole Foods grocery story in Ann Arbor, Michigan, March 8, 2012.

Credit: Reuters/Rebecca Cook

WASHINGTON | Wed Apr 25, 2012 11:44am EDT

WASHINGTON (Reuters) - Global food prices are rising again, pushed higher by costlier oil, strong demand from Asia and bad weather in parts of Europe, South America and the United States, the World Bank said on Wednesday.

The latest World Bank food price index showed the cost of food rose 8 percent between December and March. In the previous four months, prices had declined. Even after the latest rise, food prices remain 1 percent below a year ago and 6 percent below the February 2011 historical peak, the World Bank said.

"After four months of consecutive price declines, food prices are on the rise again, threatening the food security of millions of people," Otaviano Canuto, World Bank vice president for poverty reduction and economic management, said in a statement.

"The price indices of grains, fats and oils, and other foods all increased in each month since January 2012," the World Bank said.

The international rice price declined, however, due to abundant supplies of the grain and strong competition among exporters, the poverty-fighting institution said.

If current food production forecast for 2012/2013 do not materialize, global food prices could reach higher levels and required close monitoring, the World Bank cautioned.

Developing economies were hit by a food and energy price crisis in 2008/09, sparking social unrest and food export bans in some countries. Further price increases in 2010 and early 2011 led to increased production of major crops, the bank added.

It said production outlooks remain "strong" with price pressures influenced by a decline in the use of maize for ethanol production in the United States and weaker global demand due to the euro zone debt crisis.

Domestic food prices remain high especially in Africa due to a combination of large food imports and factors such as regional trade restrictions, hoarding, civil unrest and bad weather.

The World Bank said it was hard to predict whether the surge in prices this year would lead to a new global food crisis since there is no mechanism to identify the onset of a global food crisis.

The bank said it was working on developing a system to define, identify and monitor food price increases at global and national levels.

(Reporting by Lesley Wroughton; Editing by Theodore d'Afflisio and David Gregorio)

Wal-Mart appoints global anti-bribery watchdog

By Brad Dorfman
Tue Apr 24, 2012 6:02pm EDT
n">(Reuters) - Wal-Mart Stores Inc (WMT.N) said on Tuesday it has appointed a global officer to oversee compliance with a U.S. law that forbids bribes to foreign officials as it grapples with a bribery scandal that has led to more than $10 billion being cut from its market value.
The move is one of the steps the world's largest retailer has taken in the past year to manage issues related to the U.S. Foreign Corrupt Practices Act (FCPA), a 1970s law that forbids bribing foreign officials.
Wal-Mart shares closed 3 percent lower, adding to declines from Monday that wiped $10 billion from the company's market value.
Wal-Mart spokesman David Tovar declined to say when the post was created or who was named to fill it. The person appointed will report to the general counsel for Wal-Mart's international unit.
On Saturday, the New York Times reported that a senior Wal-Mart lawyer received an email from a former executive at Wal-Mart de Mexico (WALMEXV.MX) in September 2005 that described how the Mexican affiliate, known as Walmex, had paid bribes to obtain permits to build stores in the country.
According to the Times, Wal-Mart sent investigators to Mexico City and found a paper trail of suspect payments totaling more than $24 million. But the company's leaders shut down the probe and did not notify U.S. or Mexican law enforcement officials until after the newspaper informed Wal-Mart it was looking into the issue, the Times reported.
The lawyer also identified Eduardo Castro-Wright as the driving force behind years of bribery. Castro-Wright became CEO of Walmex in 2003 and moved on to other senior roles with the company. He is set to retire on July 1.
On Tuesday, MetLife Inc (MET.N), the largest U.S. life insurer, said Castro-Wright had resigned from that company's board.
"Over the past weekend, I notified you of recent events that will require my immediate and personal attention," Castro-Wright said in a letter to MetLife CEO Steve Kandarian, a copy of which was filed with securities regulators.
"Accordingly, I now must focus my energy in spending personal time with my family and in protecting my good name and business reputation," he added at the end of the letter.
Castro-Wright could not be reached for comment.
The Times said Wal-Mart knew about its reporting last year, so the timing of when the new global compliance post was created and other steps were taken raises the question of whether they were done in response to the Times story.
Wal-Mart said the global compliance officer will oversee five FCPA directors in international markets, including a compliance director in Mexico.
Wal-Mart has said it began an investigation into its FCPA compliance last fall. It said it disclosed the probe to the U.S. Department of Justice and the Securities and Exchange Commission and declined to give any more details or to make executives available for comment.
A source familiar with the matter said the Justice Department has been conducting a criminal investigation into the bribery for months.
Wal-Mart shares have been hit over the past two days, both because of concerns about the cost of the company's own investigation and defense and potential substantial fines if the allegations are found to be true, as well as concerns that further violations could be found.
"What's impacting the stock is ... the risk of potential fines and penalties resulting if the accusations prove to be true, and then, on top of that, any increased risk of contagion to other geographies," UBS analyst Robert Carroll said.
Analysts have also said the allegations could make it more difficult for Wal-Mart to expand abroad and even at home.
In New York on Tuesday, a group of 35 or so people, including members of a coalition called Walmart Free NYC and union activists, protested at City Hall, joined by politicians who said the scandal proved Wal-Mart was unworthy of operating stores in New York.
"This is not how we roll in New York," Manhattan Borough President Scott Stringer told Reuters before the protest began. "Before anything happens at all in New York, I would like to see the outcome of the investigation in Mexico."
The decision to appoint a global compliance officer could factor into whether the Department of Justice forces the company to hire DoJ-approved FCPA monitor down the road, or how long the company would need to keep the monitor, said Paul Pelletier, a former supervisor in the Justice Department's Fraud Section, which prosecutes FCPA cases. He is now at the law firm Mintz Levin.
Also on Tuesday, credit rating agency Moody's Investors Service earlier on Tuesday said that Wal-Mart's disclosure that it was investigating its FCPA compliance would have no immediate impact on the "Aa2" or "stable" ratings outlook, though it said it could revisit the rating and outlook depending on the result of the investigation.
Wal-Mart shares closed $1.78, or 3 percent, lower at $57.77 on Tuesday on the New York Stock Exchange. That follows a 4.7 percent drop on Monday that more than erased the stock's gains for the year. Walmex shares were down 1.82 pesos, or 4.8 percent, at 36.07. That stock fell 12 percent on Monday, wiping out its year-to-date gains.
(Additional reporting by Jessica Wohl, Aruna Viswanatha Phil Wahba and Ben Berkowitz; editing by Gerald E. McCormick, Andre Grenon and Bernard Orr)

MF Global judge OKs payout; Freeh says no bonuses

By Jonathan Stempel, Dave Clarke and Alexandra Alper
Tue Apr 24, 2012 7:23pm EDT
n">(Reuters) - A federal judge on Tuesday authorized the trustee liquidating MF Global Holdings Inc's (MFGLQ.PK) brokerage unit to distribute as much as $685 million to customers whose accounts had been frozen when the futures brokerage went bankrupt.
The payout authorized by U.S. Bankruptcy Judge Martin Glenn in Manhattan is on top of the more than $4 billion that the trustee James Giddens has already distributed, according to the trustee's spokesman Kent Jarrell.
It includes as much as $600 million to be paid to U.S. exchange customers, up to $50 million for customers who traded on non-U.S. exchanges, and up to $35 million for customers who held physical property such as gold bars.
Jarrell said the payout leaves Giddens about $750 million in reserve to cover potential claims by other parties, including other MF Global affiliates.
It may allow customers who traded on U.S. exchanges to recover more than 80 percent of their account values. It also represents a payback of about 10 percent for customers who traded on foreign exchanges.
Glenn approved the payout on the same day Louis Freeh, the former FBI director and now trustee for MF Global's parent company, told Congressional lawmakers he has no plans to pay bonuses to current or former company employees.
Customers had objected to bonuses in the wake of reports that executives including Chief Operating Officer Bradley Abelow, General Counsel Laurie Ferber and Chief Financial Officer Henri Steenkamp might be eligible for them.
These customers consider it unfair to pay bonuses to people they hold in part responsible for MF Global's sudden collapse.
"I want to make it very clear, it was never my intention to pay any bonuses," Freeh told the Senate Banking Committee. He said he needs to retain 15 employees to help manage the bankruptcy and secure a $22 million tax refund.
Once run by Jon Corzine, the former Goldman Sachs (GS.N) chief and New Jersey governor, MF Global filed for Chapter 11 last October 31 amid a liquidity crunch prompted by worries over its $6.3 billion bet on European sovereign debt.
The collapse has prompted a variety of regulatory and congressional investigations, in part focused on an estimated $1.6 billion of customer money that remains missing.
On Monday, the U.S. Judicial Panel on Multidistrict Litigation consolidated more than 20 lawsuits by MF Global shareholders and customers into a single case in Manhattan federal court.
The panel overruled objections by commodities customers who thought their claims should be handled separately. U.S. District Judge Victor Marrero will oversee the combined litigation.
Separately, the National Futures Association, an independent regulator for the commodities and futures industry, in a letter dated Tuesday offered U.S. Attorney Patrick Fitzgerald in Chicago its assistance in probing any potential criminal conduct surrounding MF Global's collapse.
The cases are In re: MF Global Inc, U.S. Bankruptcy Court, Southern District of New York, No. 11-02790; and In re: MF Global Holdings Ltd., U.S. District Court, Southern District of New York, No. 12-md-02338. The bankruptcy case for MF Global's parent company is In re: MF Global Holdings Ltd et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-15059.
(Reporting By Nick Brown, Basil Katz and Jonathan Stempel in New York, and Alexandra Alper and Dave Clarke in Washington, D.C.; Editing by Gary Hill)