MercoPress. South Atlantic News Agency

Soaring wheat prices cause food crises in poor countries

FAO warns cereal stocks remain at low levels in foreseeable future

Up to 36 countries worldwide are facing food crises at a time when the price of wheat has hit record levels and stocks are described as worryingly low by the latest crop and food situation report published by the UN Friday.

The Food and Agriculture Organization (FAO) said prices had soared in response to tightening world supplies, historically low levels of stocks and sustained demand. The cereal import bill for the world's poorest countries was forecast to increase by 14% on last year, totaling 28 billion US dollars when costs were already high. The poorest importing developing countries had been hardest hit by a combination of higher export and transport costs which had forced up the price of bread and other basic foods, leading to social unrest in some areas. Corn prices were also well up, despite record harvests from the US and South America where output was expected to be 25% higher than in 2006. Mexico and Brazil are also forecasted to have record crops. The hike was down to the increased demand from the expanding bio-fuel industry. Paul Racionzer from the FAO's Early Warning System said the cereal harvest was only expected to meet needs for the coming year. "We anticipate cereal stocks to remain at very low levels for the foreseeable future," he said. World stocks of wheat were expected to fall by 14 million tons to 143 million, the lowest in 25 years, which the report called "worrying." Severe storms had caused serious crop failure throughout the Caribbean, but severe floods in Asia had caused only localized damage and crop yield was expected to be good in 2007. The report listed 36 countries, 21 in Africa, 9 in Asia, including Iraq, 4 in Latin America and 2 in Europe (Moldova and Chechnya in the Russian Federation) facing shortfalls in food supplies or food insecurity.