ROME - THE world will see bumper harvests this year, but that might not be enough to protect the world's poorest countries from food bills four times higher than at the start of the decade, the United Nations forecast on Thursday.

Increased plantings and good weather will provide a global wheat crop 8.7 per cent greater than last year, one of the reasons wheat prices have slid some 50 per cent since February, the Food and Agriculture Organisation (FAO) said.

But rice - a staple for more than half the earth's population - will remain in short supply on global markets, and poor countries that rely on food imports could see food bills up 40 per cent this year after a similar price hike in 2007.

The United States will produce 16 per cent more wheat than last year in its biggest harvest since 1998. The European Union, which suspended 'set-aside' rules that force farmers to leave fields fallow, will enjoy a 13 per cent bigger wheat crop.

Continually rising demand, high costs and the need to replenish stocks will prevent prices crashing, FAO said.

'In recent weeks, international prices of many agricultural commodities have started to fall and early indications do not preclude further declines in the coming months, however prices are unlikely to return to the low levels due to a host of reasons,' it said in the report.

Rice trade tight
Rice output is set to rise this year - by 2.3 per cent - and unlike last year more rice will be produced than is used.

But export bans that several producing countries imposed to protect domestic availability of the staple will mean not enough rice is available on international markets to dent prices that soared 71 per cent in the first four months of 2008.

'The pressure would considerably ease if India, which is about to harvest a bumper 2007 secondary crop, would relax its current export curbs,' FAO said.

The global spike in food prices in the last year has been put down to a 'perfect storm' of factors including increased demand from rapidly developing countries India and China, growth in biofuels production, and the effect of high oil prices on production and distribution costs.

While supermarket prices have risen in richer nations, the effect is much harsher in developing countries where people spend 50 to 80 per cent of their income on food. Consumers have protested and in some cases rioted against price rises.

According to FAO's Food Outlook, the amount of grain used to produce fuel will rise 40 per cent this year. Of the total 98 million tonnes used for biofuel, maize will account for 92 million tonnes, 79 million of which will be transformed into ethanol in the United States.

The use of food for fuel, once touted in Europe and North America as an environmentally responsible alternative to fossil fuels, has become increasingly controversial amid soaring world food prices. -- REUTERS