Wheat prices hurting poor countries

International wheat prices have hit a record high during the past three months, pushing the domestic cereal costs in poor countries beyond the reach of many locals, the United Nations Food Agency reported Saturday.

Wheat prices have risen sharply since June because of tightening of global supplies, historically low levels of stocks and sustained demand, according to the latest issue of the FAO crop prospects and food situation report, released at the agency's headquarters in Rome.

Maize prices have also jumped, despite this year's bumper crop in North, Central and South America, because of continuing strong demand from the biofuels industry.

Paul Racionzer of the FAOs Global Information and Early Warning System said that cereal stocks, especially of wheat, are likely to remain at low levels for the foreseeable future.

Wheat stocks are close to their lowest level in 25 years.

"On current indications, this year's cereal harvest would only just meet expected utilisation levels in the coming year, which means that stocks will not be replenished," he said.

The higher export prices for wheat and other cereal crops besides surging freight rates have forced the price of bread and other by-products beyond the means of many people in the states classified as low-income food-deficit countries (LIFDCs), leading to social unrest in some areas.

The total cereal import bill for LIFDCs is forecast to hit an all-time high of USD 28 billion in 2007-08, a rise of 14 per cent in last year's figures, the report said.

In total, developing countries are likely to spend USD 52 billion on cereal imports, it added.