Rome, November 6:

World cereal production is expected to hit a record high this year, but global financial turmoil could trigger a new price surge and unleash more severe food crises, a UN agency said.

Cereal output, forecast to rise by 5.3 per cent from last year to 2.24 billion tonnes, was boosted by increased plantings encouraged by good prices and weather, Food and Agriculture Organisation 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 has tightened credit markets, and introduced greater uncertainty about next year’s prospects,” said Concepcion Calpe, one of the report’s main authors.

Calpe warned should the current price volatility continue in 2008-2009, “output could be affected and a new price surge might take place in 2009-2010.