MercoPress. South Atlantic News Agency

UN Food Program warns on soaring grain and energy prices

The head of the UN World Food Programme has warned that the rise in basic food costs could continue until 2010. Josette Sheeran blamed soaring energy and grain prices, the effects of climate change and demand for bio-fuels.

Ms Sheeran has already warned that the WFP is considering plans to ration food aid due to a shortage of funds. Some food prices rose 40% last year and the WFP fears the world poorest will buy less food, less nutritious food or be forced to rely on aid. Her statements happened on the day oil, gold and copper among other commodities reached record highs as investors fled from the weakening US dollar. Speaking after briefing the European Parliament, Ms Sheeran said the agency needed an extra 375 million US dollars for food projects this year and 125 million to transport it. She said she saw no quick solution to high food and fuel costs. "The assessment is that we are facing high food prices at least for the next couple of years," she said. Ms Sheeran said global food reserves were at their lowest level in 30 years - with enough to cover the need for emergency deliveries for 53 days, compared with 169 days in 2007. The head of the UN food program said that among the contributing factors to high food prices is bio-fuel production. Ms Sheeran says demand for crops to produce bio-fuels is increasing prices for food stuffs such as palm oil. Ms Sheeran said governments needed "to look more carefully at the link between the acceleration in bio-fuels and food supply and give more thought to it". The WFP says countries where price rises are expected to have a most direct impact include Zimbabwe, Eritrea, Haiti, Djibouti, the Gambia, Tajikistan, Togo, Chad, Benin, Burma, Cameroon, Niger, Senegal, Yemen and Cuba. Areas where the WFP is already seeing an impact include: Afghanistan: 2.5 million people in Afghanistan cannot afford the price of wheat, which rose more than 60% in 2007; Bangladesh: The price of rice has risen 25% to 30% over the last three months. In 2007, the price rose about 70%. El Salvador: rural communities are buying 50% less food than they did 18 months ago with the same amount of money. This means their nutritional intake, on an already poor diet, is cut by half. Finally shed warned that rising food prices have already led to riots in Burkina Faso, Cameroon, Senegal and Morocco. Virulent wheat fungus spreading in Asian grain areas says FAO The United Nations food agency has asked wheat-producing nations in Asia, including India and Pakistan to be on high alert following a report that a new virulent wheat fungus has moved to major wheat-growing areas in Iran. The Rome-based Food and Agriculture Organization-FAO said that about 80% of all wheat varieties planted in Asia and Africa are susceptible to wheat stem rust, a fungus capable of destroying entire crop fields. The FAO reports that wheat stem ruse, whose spores are carried by wind across continents, was previously found in East Africa and Yemen. But now it has moved to Iran, a major wheat producer, where its presence has been confirmed by laboratory tests in some localities in Broujerd and Hamedan in the country's west. The FAO said the detection of the wheat-rust fungus in Iran is extremely worrisome and asked major wheat-producing nations to Iran's east, including Afghanistan, India, Pakistan, Turkmenistan, Uzbekistan and Kazakhstan, to be on high alert. "The fungus is spreading rapidly and could seriously lower wheat production in countries at direct risk" said Shivaji Pandey, Director of FAO Plant Production and Protection Division. Affected countries and the international community have to bolster disease surveillance and ensure that the spread of the disease is checked in order to reduce the risk to countries that are already hit by high food prices, the U.N. agency said in Rome on Wednesday. Meanwhile, Iran has said that it will strengthen its research capabilities to tackle the new fungus and develop wheat varieties that are stem rust-resistant. The disease called Ug99 first surfaced in Uganda and subsequently spread to Kenya and Ethiopia. Both countries are experiencing serious crop yield losses due to a rust epidemic last year. Additionally in 2007, FAO confirmed that a more virulent strain was found in Yemen. It is now feared that the new threat could further push up global wheat prices by at least 10-15%. In the spot retail market, wheat prices have surged by 40% in last one year on global shortage. Global wheat production is estimated at 603 million tons in 2007, up 1.2% from 2006. In Asia, the output is estimated to rise by 1.7% to 928 million tons in 2007 compared with 912.6 million tons last year.