UN sounds alarm on higher food costs Food commodities will be more expensive this decade than in 2000-2010 due to the impact of triple-digit oil prices, demand from emerging countries, and the threat of weather-related crop failures, two leading forecasters have said. The UN's Food and Agriculture Organisation and the OECD, the rich countries" think-tank, said on Wednesday crop prices were expected to average 10-30 per cent higher over the period to 2021 compared with the level of the previous decade. "Nominal prices are expected to trend upwards over the next 10 years," it said. The price outlook, coupled with slowing agricultural production, drew warnings from officials that output would fall short of demand over the coming years. "This is the longest up cycle in real prices [for agricultural commodities] in many decades," said Merritt Cluff, FAO senior economist. We expect higher prices to be a feature of the outlook for some time. The warning in the annual OECD-FAO Agricultural Outlook report comes as the cost of commodities, including corn to soyabeans, rises to fresh highs after the worst drought in the US for 25 years threatens to hit crop yields. Spot corn prices rose on Wednesday to $7.85 a bushel, within a whisker of their 2011 record high. The world economy has faced two food inflation scares over the past five years: during the 2007-08 food crisis, the first in 30 years, and again in 2010-11 after Russia suffered a crop failure because of a drought and Moscow imposed an export ban on grains. Policy makers fear the global economy could face food inflationary pressures this year due to the bad crop in the US. The FAO and the OECD said in the report that higher oil prices were "a fundamental factor behind the higher agricultural commodity price projections." affecting not only oil-related costs of production, such as fuel and fertilisers, but also increasing the demand of grains and oilseeds for biofuels. The report warned that the biofuel industry would consume a "growing share of the global production" of agricultural commodities by 2021, forecasting that more than a third of the world's sugarcane, around 16 per cent of vegetable oil and 14 per cent of coarse grains such as corn would be transformed into fuels. The organisations warned the world needed to grow an additional 60 per cent more food by 2050, putting an emphasis on food security. José Ángel Gurría, OECD secretary-general, said that the report was a wake-up call. We can feed nine billion people by 2050 without stretching things too far but we have to organise ourselves better. One of the things we have not done well so far is to get agriculture back to a business, to be attractive to investors," he told reporters in Rome. The report highlighted that global food consumption patterns were changing as more of the world's populations live in cities. Demand for fish products is expected to remain strong due to population and income growth in developed countries, while poultry meat, sugar, vegetable oils and selected dairy products should see up to 40 per cent increased consumption in developing and emerging countries.