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Grain prices hit new highs

LONDON: World grain prices set new records on Monday as the United Nations Food and Agriculture Organization (FAO) renewed a warning that world food stocks are perilously low.

FAO director general Jacques Diouf told a congress of world farmers at Versailles that stocks after drought in several regions were at the lowest since a World Food Conference charted a strategy to banish hunger 20 years ago.

"Today we are far from that goal. Around 800 million people in the world currently suffer chronic undernutrition," he said.

A blistering rally by wheat and maize prices in Kansas City and Chicago Chicago futures pits, that will weigh on Third World import bills, meanwhile reflected new worry on crop conditions after dry weather in the United States, the biggest exporter.

Kansas City wheat hit a fresh all-time high of $6.59 per bushel on Monday. Chicago May corn (maize) futures were at a record $4.67-1/2 per bushel, also in early trading and buoyed by export demand.

World wheat stocks have dwindled to some 16 percent of one year's needs from nearly 30 percent in the late 1980s.

Concerns about dry weather may arise next in the European Union which has already suspended exports in order to keep a lid on its internal bread prices.

Dry, light soils in north and eastern Germany eastern Germany badly need rain to allow crops to germinate, a spokesman for the DBV farm union said on Monday.

"There's no panic but there should be some rain within a week to allow crops to catch up on moisture," he said.

Flooding in some areas has delayed the harvesting of South Africa's maize crop by up to a month, said Giel van Zyl, general manager of the National Maize Producers Organisation.

South Africa expects a bumper maize crop of more than 9.5 million tonnes, more than double last season.

Elsewhere in world commodities trading on Monday, the gold price edged up slightly on short covering to a London afternoon fixing of $391 per ounce.

And crude oil prices bounced higher after a sharp drop of 20 per cent in value earlier this month.

World benchmark Brent Blend crude oil futures for June traded in London at $19.30 per barrel. That remains $4 on values 10 days ago but compares with only $18.50 last week.

Brokers said the rebound was largely technical, helped by growing US gasoline demand. Continuing talks at the United Nations also had yet to reach an accord to ease the 1990 Gulf War embargo on the oil exports of Iraq.

Industrial metals held at little changed levels during London Metal Exchange (LME) trading. Copper reached a fresh 3-1/2 month high of $2,615 per tonne but drifted back under speculative selling.-Reuter