World cereal production is expected to hit a record high this year, but the global financial turmoil could trigger a new price surge and unleash more severe food crises, a U.N. agency said Thursday.
Cereal production, which is forecast to rise 5.3 percent from last year to 2.24 billion tons, was boosted by increased plantings encouraged by high prices and good weather, the Food and Agriculture Organization said.
However, the Rome-based agency warned in a new report that farmers in developing countries burdened by the rising cost of seed, fertilizer and other farm inputs may be unable to expand or keep up with production next year.
"The financial crisis of the last few months ... has contributed to tighten credit markets, and introduced greater uncertainty about next year's prospects," said Concepcion Calpe, one of the report's main authors. "Many producers are adopting very conservative planting decisions," she said.
For the first time in four years, world cereal production is likely to cover short-term needs and help replenish much depleted global stocks.
However, Calpe said that should the current price volatility continue in 2008-2009, "output could be affected to such an extent that a new price surge might take place in 2009-2010," causing even more severe food crises than those that sparked riots and protests worldwide early this year.
The agency said in the report that this year's cereal production recovery centered mainly in rich countries while farmers in developing nations experienced more difficult access to credit and high prices of inputs.
FAO said the food price surge in past months pushed the number of hungry people to 923 million worldwide. The agency has estimated that 75 million more people were undernourished in 2007 and another 25 million people will be thrown into hunger this year.
