G7 to tackle soaring oil, food prices next week: Japan

Finance chiefs from the Group of Seven rich nations will discuss ways to try to rein in soaring oil and food prices when they meet next week, Japan's finance minister said on Wednesday.

But with growing demand, supply uncertainties and investment inflows all driving commodity prices higher, the G7 may not be able to come up with measures "to reduce them overnight", said Fukushiro Nukaga.

"It is important with regard to oil prices that consumer countries think about energy saving measures while producer countries can work to expand their production capabilities and to raise market transparency," he told reporters.

Finance ministers and central bank chiefs from Britain, Canada, France, Germany, Italy, Japan and the United States will gather in the western Japanese city of Osaka for a two-day meeting starting from June 13.

Nukaga said high oil prices would hurt the economy.

"For the past four years, oil prices have shot up greatly so if the current level of prices is maintained for a long time then of course it is bound to have an impact on countries' corporate earnings and personal spending," he said.

At the same, global food prices have more than doubled in recent years.

"Particularly for people in developing countries, who spend more than half of their household budget on food, the impact is really serious," Nukaga said.

He said the G7 would also discuss the ongoing fallout from a global credit squeeze sparked by a housing slump. Many of the world's major banks have suffered heavy losses on investments in mortgage-backed securities that have plunged in value due to the housing woes.

Nukaga said it was still "too early to say" whether an end to recent turmoil in financial markets was in sight as the problems in the US housing and credit markets had not yet been fully resolved.