Wheat prices hit record-high levels

International wheat prices have increased sharply since June, hitting record highs in September in response to tightening world supplies, historically low levels of stocks and sustained demand, according to FAO's latest Crop Prospects and Food Situation report, issued today.

The combination of higher export prices and soaring freight rates is pushing up domestic prices of bread and other basic food in importing developing countries, hitting the group of Low-Income Food-Deficit countries (LIFDCs) particularly hard and causing social unrest in some areas, the report said.

The total cereal import bill of the LIFDCs is forecast to increase considerably for the second consecutive year, reaching an all-time high of US$28 billion in 2007/08, up roughly 14 percent from last year's already high level. Overall, developing countries are likely to spend a record US$52 billion on cereal imports, according to the report.

Maize prices are also well above last year's levels, despite the bumper crop materialising this year, mainly reflecting continued strong demand from the biofuel industry, the report said.

In the United States, the world's largest producer of maize, output is forecast to increase 26 percent from 2006 to an all-time high. According to the report, record maize harvests are also expected in South America, with production in Brazil increasing by one-quarter from last year's good level, and in Mexico, the largest producer in Central America.

(WHO)